Question

Q 6

Given the following data.

Quantity	0	1	2	3	4	5	6	7	8
Price	8	8	8	8	8	8	8	8	8
Total cost	8	20	23	24	32	40	48	56	64

(a) Generate the following information; Total Revenue (TR), Marginal Revenue (MR), Average Revenue (AR), Marginal Cost (MC), Average Cost (AC) and Total profits at each level of output.

(b) Draw the graphs of the Total Revenue and Total Cost, at what point is profit maximized?

(c) On a separate graph paper, draw the graphs of the Marginal Revenue, Marginal Cost and Average Cost curves.

(d) At what point is profit maximized and at what cost per unit?

(e) Do you see any relationship in the graphs at (b) and (c)?   

Answer 1