Show graphically the maximum total profit that the firm of Problem 5 earns if the price of milk (product A) falls to $0.50 while the price of cheese (product B) remain at $1.
*Just work on the case of TC=$90.

Problem 5
The dairy farm Company, a small producer of milk and cheese, has estimated the quantities of milk and cheese that it can produce with three levels of total expenditures or total costs. These are indicated in the following table. If the price of milk (product A) and the price of cheese (product B) that the firm receives are $1 each per unit of the products, draw a figure showing the that the firm can earn at each level of TC and the maximum total profit ( overall maximum profit that the firm can earn for the three different levels of TC.

TC=$170 TC=$90

Product A Product B Product A Product B
80 0 100 0
70 40 90 60
50 70 70 90
20 90 30 120

TC=$140

Product A Product B

130 0
110 70
80 120
40 150
0 160

Solution Summary

The maximum total profit is depicted in graph form in a .jpeg attachment with a table of values below.

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