1. Estimate maginal cost and marginal revenue at 40 units. Label appropriately.

Question

1. Estimate maginal cost and marginal revenue at 40 units. Label appropriately.

2. Estimate the number of units produced and sold where marginal cost and marginal revenue are equal.

3. Estimate the number of units that should be produced and sold in order to generate possible profit.

PLEASE SHOW ALL OF YOUR WORK!!! THIS MEANS SHOW STEP BY STEP HOW YOU ARRIVED AT YOUR ANSWER(S). INCLUDE ANY EQUATIONS OR FORMULAS USED TO ARRIVE AT YOUR ANSWER(S). I REALLY WANT TO LEARN FROM THIS. THANKS!

The graph to the right shows cost and revenue as functions of number of units of a product produced and sold. You need to decide which graph is the cost function and which graph is the revenue function.

Explanation / Answer

1. At 40 units, marginal cost is 340 and marginal revenue is 500.

2. The number of units produced and sold is 22, where the marginal cost and marginal revenue are equal.

3. To generate the possible profit, 85 units should be produced.

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