Consider the firm discussed in Problem 23-13. If the firm were to produce the 12th unit and thereby incur hourly total costs of $65, what would be its marginal cost? Based on this answer and your answers to Problem 23-13, would producing 12 units maximize the firm's profits? What would be its hourly economic profits?

Problem 23-13

Suppose that the firm with the costs and revenues tabulated in Figure 23-2 is contemplating whether to produce 12 units of output. If it were to produce this many units, what (if anything) would happen to the market price? What would be the firm's marginal revenue for the 12th unit produced? What would be the firm's total revenues per hour?

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(1) Total Output and Sales per Hour (Q) 0 1 2 3 4 5 69 7 8 10 11 (2) Total Costs (TC) $10 15 18 20 21 23 26 30 35 41 48 56 (3) Market Price (P) $5 5 5 5 5 5 5 5 5 555 (4) Total Revenues (TR) (4) = (3) x (1) $0 5 10 15 20 25 30 35 40 45 50 55 (5) Total Profit (TR-TC) (5) = (4)-(2) -$10 -10 -8 -5 -1 2 4 5 4 2 Panel (a) -1 (6) Average Total Cost (ATC) (6) = (2)+(1) $15.00 9.00 6.67 5.25 4.60 4.33 4.28 4.38 4.56 4.80 5.09 (7) Average Variable Cost (AVC) - $5.00 4.00 3.33 2.75 2.60 2.67 2.86 3.12 3.44 3.80 4.18 (8) Marginal Cost (MC) (8) = Change in (2) Change in (1) $5 3 5678 A WN - N 2 3 Marginal Revenue (MR) (9) = Change in (4) Change in (1) $5 5555555