Question
Consider the data for a price-setting firm in the table below. All revenue and cost figures are in expressed in dollars. Quantity 0 2 4
Consider the data for a price-setting firm in the table below. All revenue and cost figures are in expressed in dollars.
Quantity | 0 | 2 | 4 | 6 | 8 | 10 | 12 | 14 | 16 | 18 |
---|---|---|---|---|---|---|---|---|---|---|
Total Revenue | 0 | 200 | 380 | 540 | 680 | 800 | 900 | 980 | 1040 | 1080 |
Total Cost | 70 | 140 | 210 | 280 | 350 | 420 | 490 | 560 | 630 | 700 |
Using the information above, answer the following questions.
The marginal revenue for the firm of selling the 10th unit of output is Answer dollars.
The marginal cost to the firm of producing the 4th unit of output is Answer dollars.
The firm will maximise profits at an output (quantity) of Answer units.
The price the firm will charge for this level of output will be Answer dollars.
Firms maximise profits at a level of output where
Answer = marginal revenue equals marginal cost
total revenue equals total cost
price equals marginal revenue
price equals marginal cost.
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