Labor Output Total Cost (TC) Marginal Cost (MC) Average Cost Total Revenue P=125

Question

Labor Output Total Cost (TC) Marginal Cost (MC) Average Cost Total Revenue P=125 0 0 $ 3,000.00 $ - 1 10 $ 4,250.00 $ 125.00 $ 425.00 $ 1,250.00 2 25 $ 5,500.00 $ 83.33 $ 220.00 $ 3,125.00 3 45 $ 6,750.00 $ 62.50 $ 150.00 $ 5,625.00 4 70 $ 8,000.00 $ 50.00 $ 114.29 $ 8,750.00 5 95 $ 9,250.00 $ 50.00 $ 97.37 $11,875.00 6 115 $10,500.00 $ 62.50 $ 91.30 $14,375.00 7 133 $11,750.00 $ 69.44 $ 88.35 $16,625.00 8 149 $13,000.00 $ 78.13 $ 87.25 $18,625.00 9 164 $14,250.00 $ 83.33 $ 86.89 $20,500.00 10 174 $15,500.00 $ 125.00 $ 89.08 $21,750.00 11 182 $16,750.00 $ 156.25 $ 92.03 $22,750.00 12 188 $18,000.00 $ 208.33 $ 95.74 $23,500.00 13 192 $19,250.00 $ 312.50 $ 100.26 $24,000.00 Pearl owns a company that produces Super Toys. The table above shows that Pearls

Explanation / Answer

1) MR = $125 constant 2) PRofit maximization occures when MC = $125 and TR -TC is maximum. This is happening for 174 units 3) Total profit = $21750 - $15500 = $6250

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