Purchase Solution

# Finding optimal output level

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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.

##### Solution Summary

Solution describes the methodology to find out the optimal output level. It also calculates associated profit with optimal output level.

##### 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 ...

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###### Education
• BEng (Hons) , Birla Institute of Technology and Science, India
• MSc (Hons) , Birla Institute of Technology and Science, India
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