You have the following information about the relation between price and number of units sold for a service offered by a given firm:

The variable costs are $20/ unit and the fixed costs are $500. Illustrate in a graph: (a)
marginal revenue;

(b) marginal costs; and

(c) profit across the various levels of units sold. What is the profit- maximizing price/ quantity?

Transcribed Image Text:

Price Units sold 100.00 0 90.00 10 80.00 20 70.00 30 60.00 40 50.00 50 40.00 60 30.00 70 20.00 80 10.00 90 0.00 100