Question

The following table depicts the prices and total costs a local used-book store faces. The bookstore competes with a number of similar stores, but it capitalizes on its location and the world-of-mouth reputation of the coffee it serves to its customers.

(1) Output (Books)	(2) Price per Book $	(3) Total Cost $	(4) Average Total Cost $	(5) Total Revenue $	(6) Total Profit $	(7) Marginal Cost $	(8) Marginal Revenue $
0	20.00	7.00	-			-	-
1	19.00	21.50
2	18.00	34.40
3	17.00	45.40
4	16.00	55.00
5	15.00	63.30
6	14.00	72.30
7	13.00	84.90
8	12.00	101.20
9	11.00	121.30
10	10.00	146.40

a. Where possible, complete the missing cells in the table

b. Based on marginal analysis, what is the approximate profit-maximizing level of output for this business? Explain.

Answer 1