Question

Start the price at the number of letters in your first and last names combined for Q = 1, and then reduce the price as Q increases. ( My First name letters are 6 and the last name letters are 8 )

For costs, begin with TC = 6 at Q = 1, then you may use any numbers you like for costs. You may need to play around with the numbers to make this work out.

Show that MR = MC at profit maximization. Graph MR, MC and Price and show the profit maximizing level of output. (You don’t need to graph ATC and show the profit rectangle).

Answer #1

Answer;

The table:

Price | Quantity | TR | MR | TC | MC | Profit |

14 | 1 | 14 | 0 | 6 | 0 | 8 |

13 | 2 | 26 | 12 | 14 | 8 | 12 |

12 | 3 | 36 | 10 | 20 | 6 | 16 |

11 | 4 | 44 | 8 | 25 | 5 | 19 |

10 | 5 | 50 | 6 | 29 | 4 | 21 |

9 | 6 | 54 | 4 | 32 | 3 | 22 |

8 |
7 |
56 |
2 |
34 |
2 |
22 |

7 | 8 | 56 | 0 | 37 | 3 | 19 |

6 | 9 | 54 | -2 | 41 | 4 | 13 |

5 | 10 | 50 | -4 | 46 | 5 | 4 |

4 | 11 | 44 | -6 | 53 | 7 | -9 |

3 | 12 | 36 | -8 | 62 | 9 | -26 |

2 | 13 | 26 | -10 | 73 | 11 | -47 |

1 | 14 | 14 | -12 | 86 | 13 | -72 |

Profit is maximum at Q = 6 and Q = 7.

At Q = 6, MR($4) is greater than MC ($3). So, firm will produce
more till MR = MC, that is at Q = 7.

Graph:

Fom the graph, it is evident that Q = 7, P = 8. Output is where MR=MC.

Complete a table for Q, Price, TC, MC, MR and
profits.
Start the price at the number of letters in your first
and last names combined for Q = 1, and then reduce the price as Q
increases.
For costs, begin with TC = 6 at Q = 1, then you may use
any numbers you like for costs. You may need to play around with
the numbers to make this work out.
Show that MR = MC at profit...

Each scenario below provides the price and output level at
which a single-price monopolist is currently operating. In each
case, determine the firm’s profit per unit, the firm’s total
profit, and whether the firm should increase or decrease its output
in order to maximize profits, assuming the firm does not shut down.
(Drawing diagrams may help you to answer these questions but are
not mandatory for this question. Prices and costs are in
dollars.)
a. P=15,Q=600,MR=7,ATC=5,MC=7
b. P=18,Q=300,MR=13,ATC=5.50,MC=3.50 c.
P=11,Q=680,MR=2,ATC=6,MC=9...

2.) For a price-searcher, assume
the demand curve is Q = 20 - P.
a.) Construct a
four-column table of P and Q with P ranging from 20 to
0. Calculate TR and MR and add them to your table.
b.) Graph D and MR. (Plot
points—with $ on the vertical axis and Q on the horizontal
axis.)
c.) Why is P > MR
(after the first unit)
3.) Using the same
price-searcher, assume the firm faces the...

Output (Cases)
FC
VC
TC
ATC
AVC
MC
0
20
1
12
2
20
3
16
4
37
5
67
6
61
7
81
8
116
9
191
Paul’s Gourmet Chocolate Company: Cost
Structure with Revenues
Complete this table. On graph paper, graph Output on the
horizontal axis and ATC, AVC, and MC on the vertical axis. Look at
the graph to see how the different costs relate.
Output (Cases)
Marginal Cost (MC)
Total Cost (TC)
Marginal Revenue...

Suppose the following schedule represents the demand curve for a
non- discriminating, single price monopolist:
P Q TR MR
18 0
15 1
12 2
9 3
6 4
3 5
0 6
a. Complete the table.
b. Plot the demand and MR curves below.
c. Explain why the MR of the third unit is less than its price
($9).
d. Calculate the Elasticity of Demand at the price of $12?
e. Label the elastic, unitary elastic, and inelastic segments...

. Monopoly. Suppose the following schedule represents the demand
curve for a non-
discriminating, single price monopolist:
P
Q
TR MR
18 0
15 1
12 2
9 3
6 4
3 5
0 6
a. Complete the
table.
b. Plot the
demand and MR curves below.
c. Explain why
the MR of the third unit is less than its price ($9).
d. Calculate the
Elasticity of Demand at the price of...

2. Monopoly. Suppose the following schedule represents the
demand curve for a non- discriminating, single price
monopolist:
P Q TR MR
18 0
15 1
12 2
9 3
6 4
3 5
0 6
a. Complete the table.
b. Plot the demand and MR curves below.
c. Explain why the MR of the third unit is less than its price
($9).
d. Calculate the Elasticity of Demand at the price of $12?
e. Label the elastic, unitary elastic, and...

Profit Maximization for a Perfectly Competitive
Firm
Goal: To determine how much candy George’s
company should produce to make the maximum profit it can possibly
make.
What you must know in order to successfully complete
this assignment:
The definition of profit and how to calculate it.
The definitions of Total Cost (TC), Total Variable Costs (TVC)
Total Fixed Costs (TFC), and Marginal Costs (MC) and how to
calculate them.
The definitions of Total Revenue (TR) and Marginal Revenue (MR),
how...

The demand for product Q is given by Q = 136 -.4P and
the total cost of Q by:
STC = 3000 + 40Q - 5Q^2 + 1/3Q^3
A. Find the price function and then the TR function. See
Assignment 3 or 4 for an example.
B. Write the MR and MC functions below. Remember: MR =
dTR/dQ and MC = dSTC/dQ. See Assignment 5 for a review of
derivatives.
C.What positive value of Q will maximize total
profit? Remember, letting...

Nimbus, Inc. makes brooms and then sells them door-to-door. The
table below demonstrates the relationship between the number of
workers and Nimbus’s output in a given day. The firm experiences
fixed costs of $200, and its variable cost (workers) is $100 per
worker per day. The broom industry is perfectly competitive.
Fill in the table below:
Number of Workers
Brooms
(Total
Output)
Q
Marginal Product
MP
Fixed
Cost
FC
Variable Cost
VC
Total Cost
TC
Avg Fixed Cost
AFC
Avg...

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