Finding optimal output level
Total Output (Q) Total Price (P) Total Revenue (TR) Total Cost (TC)
0 1900 0 1000
1 1700 1700 2000
2 1650 3300 2800
3 1600 4800 3500
4 1550 6200 4000
5 1500 7500 4500
6 1450 8700 5200
7 1400 9800 6000
8 1350 10800 7000
9 1300 11700 9000
A. Use the following to calculate profit at each quantity of output.
B. Use the table in exercise A to calculate marginal revenue and marginal cost
C. Use the information in A and B to graphically show maximum profit.
Label the profit-maximizing quantity and price, total cost, total revenue, and profit.
https://brainmass.com/economics/price-levels/finding-optimal-output-level-362122
Solution Preview
Please refer attached file for graph and better clarity of tables.
Total Output(Q) Total Price (P) Total Revenue (TR) Total Cost (TC) Total Profit MC* MR**
TR-TC
0 1900 0 1000 -1000
1 1700 1700 2000 -300 1000 1700
2 1650 3300 2800 500 800 1600
3 1600 4800 3500 1300 700 1500
4 1550 6200 ...
Solution Summary
Solution describes the methodology to find out the optimal output level. It also calculates associated profit with optimal output level.