The setting is a Ralph Lauren outlet store, and the product line is Polo golf shirts. A product manager and the General Manager for Outlet Sales are analyzing the discounted price to be offered at the outlet stores. Lets work through the decision at the level of one color of golf shirts sold per outlet store per day. The decision being made is how low a price to select at the start of any given day to generate sales at that price throughout the day. The demand, revenue, and variable cost information are collected on the following spreadsheet:

Where is the profit-maximizing level of output? Based on your understanding of marginal analysis, explain why you made this choice in the context of why it could not possibly be at any other output level.

QUANTITY SOLD UNIFORM PRICE ($) TOTAL REVENUE ($) MARGINAL REVENUE ($) VARIABLE COST ($) 0 50.00 0 0 28 1 48.00 48 48 28 2 46.00 92 44 28 3 45.00 135 43 28 4 44.00 176 41 28 5 42.00 210 34 28 6 40.00 240 30 28 7 38.31 268 28 28 8 36.50 292 24 28 9 34.50 311 19 28 10 16 28 11 13 28 12 10 28 13 7 28 14 4 28 15 o 28 16 (1) 28 17 - (4) 28 18 (7) QUANTITY SOLD UNIFORM PRICE ($) TOTAL REVENUE ($) MARGINAL REVENUE ($) VARIABLE COST ($) 0 50.00 0 0 28 1 48.00 48 48 28 2 46.00 92 44 28 3 45.00 135 43 28 4 44.00 176 41 28 5 42.00 210 34 28 6 40.00 240 30 28 7 38.31 268 28 28 8 36.50 292 24 28 9 34.50 311 19 28 10 16 28 11 13 28 12 10 28 13 7 28 14 4 28 15 o 28 16 (1) 28 17 - (4) 28 18 (7)