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Question about Profit Mazimization

1. Use the following to calculate profit at each quantity of output.
Total Total
Output Price Revenue Cost
(Q) (P) (TR) (TC)
0 $1,900 $ 0 $1,000
1 $1,700 $ 1,700 $2,000
2 $1,650 $ 3,300 $2,800
3 $1,600 $ 4,800 $3,500
4 $1,550 $ 6,200 $4,000
5 $1,500 $ 7,500 $4,500
6 $1,450 $ 8,700 $5,200
7 $1,400 $ 9,800 $6,000
8 $1,350 $10,800 $7,000
9 $1,300 $11,700 $9,000

2. Use the table in exercise 1 to calculate marginal revenue and marginal cost.

3. Use the information in exercises 1 and 2 to graphically show maximum profit. Label the profit-maximizing quantity and price, total cost, total revenue, and profit.

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Solution Summary

A complete, neat and step-by-step solution to these 3 questions is provided in the attached Excel file.

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