Question

Q                  TR              MR                  TC                             MC                             ATC

0                     0                -                       100                            -                                   -

1                   200            200                    200                         100                               200

2                   400              200                   350                          150                              175

3                   600              200                  550                          200                               183.3

4                   800              200                   800                          250                               200

5                   1000            200                   1100                        300                               220

Quantity of Visits (Q)

Total Revenue (TR)

Marginal Revenue (MR)

Total Costs (TC)

Marginal Cost (MC)

Average Total Cost (ATC)

In a MS Word document, define total revenue (TR), marginal revenue (MR), and the profit-maximizing rule for a single investor-owned firm. Then calculate MR, MC, and ATC for Table 3.1. Next, give the profit-maximizing level of output (Q).

Now, assume the firm is a tax-exempt agency. One possibility is that tax-exempt agencies maximize output. Define the output-maximization rule and then give the output-maximizing level of output (Q) given Table 3.1. What happens to the supply curve for an output-maximizing firm if it increases the quality of their visits?

Check my calculation for MR, MC, ATC.

Answer 1

Q	TR	MR	TC	MC	ATC	Profit
0	0		100			-100
1	200	200	200	100	200	0
2	400	200	350	150	175	50
3	600	200	550	200	183.3333	50
4	800	200	800	250	200	0
5	1000	200	1100	300	220	-100

Total revenue (TR): It is the product of price and quantity
Marginal revenue (MR): Change in total revenue for a change in quantity
Profit-maximizing rule or output maximising is at a point where ATC is minimum and here it is at Q = 2
For the increase in quality of visits the supply curve would shift to right for an increase in demand because of increased quality.
The calculations are fine and a profit column is added in the above table.