Output Price Total Cost

0 $100 $40

1 90 60

2 80 70

3 70 85

4 60 105

5 50 130

6 40 160

7 30 200

8 20 250

9 10 310

Use the table to answer the following questions:

a) Assuming no price discrimination, identify the profit maximizing level of output and identify total profit at the profit maximizing level of output. Show work. Hint: Calculate total revenue.

b) For what range of output is demand elastic? Explain or show. Hint: When does MR turn negative?

c) If the firm was able to perfectly price discriminate, how many units would they produce to maximize profit? How much is total profit in this case? Show work. Hint: Each unit is sold for its maximum price. For example, unit 1 is sold for $90, unit 2 for $80, unit 3 for $70. Total revenue for 3 units = 90+80+70.