Fill in the table below. Output Price Total Revenue Marginal Revenue Total Cost
ID: 2442887 • Letter: F
Question
Fill in the table below.
Output
Price
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
0
1600
0
---------------
120
--------------
1
1600
260
2
1560
620
3
1520
1310
4
1480
2260
5
1440
3540
6
1400
5100
What is the profit max output level?
What is the profit per unit (Price-ATC)? show all necessary work
What is the total economic profit? Show all necessary work
Output
Price
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
0
1600
0
---------------
120
--------------
1
1600
260
2
1560
620
3
1520
1310
4
1480
2260
5
1440
3540
6
1400
5100
Explanation / Answer
Table :
Total revenue = Price * Output
Marginal revenue = TRn - TR(n-1)
Marginal cost = TCn - TC(n-1)
Profit maximizing output level is 5 as at this level of output MR = MC.
Formula :
Average cost = total cost / output
- Total economic profit :
Total economic profit = Total revenue - Total economic cost
Here Total economic cost = Total cost, and we know that the firm will produce only 5 units of output so the total economic profit = Total revenue at 5 level of output - Total cost at 5 level of output. = 7200 - 3540 = 3660.
So total economic profit = $3660.
Output Price Total revenue Marginal revenue Total cost Marginal cost 0 1600 0*1600 = 0 -------- 120 ----- 1 1600 1*1600 = 1600 1600 - 0 = 1600 260 260 - 120 = 140 2 1560 2*1560 = 3180 3180 - 1600 = 1580 620 620 - 260 = 360 3 1520 3*1520 = 4560 4560 - 3180 = 1380 1310 1310 -620 = 690 4 1480 4*1480 = 5920 5920 - 4560 = 1360 2260 2260 - 1310 = 950 5 1440 5*1440 = 7200 7200 - 5920 = 1280 3540 3540 - 2260 = 1280 6 1400 6*1400 = 8400 8400 -7200 = 1200 5100 5100 - 3540 = 1560Related Questions
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