Marginal Analysis
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Evaluate the price (P) and the output (Q) data in the following table. COPY AND PASTE THE TABLE TO YOUR WORD DOCUMENT, THEN FILL IN THE BLANK SPACES.
Q P TR MR AR
0 $80
1 70
2 60
3 50
4 40
5 30
6 20
7 10
8 0
A. Compute the related total revenue (TR), marginal revenue (MR), and average revenue (AR) figures.
B. At what output level is revenue maximized?
Revenue Maximization.
Assume the following output (Q) and price (P) data. COPY AND PASTE THE TABLE TO YOUR WORD DOCUMENT, THEN FILL IN THE BLANK SPACES.
Q P TR MR AR
0 $50
1 45
2 40
3 35
4 30
5 25
6 20
7 15
8 10
9 5
10 0
A. At what output level is revenue maximized?
B. Why is marginal revenue less than average revenue at each price level?
Profit Maximization.
Fill in the missing data for price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), profit ( p ), and marginal profit (M p ) in the following table. COPY AND PASTE THE TABLE TO YOUR WORD DOCUMENT, THEN FILL IN THE BLANK SPACES.
Q P TR MR TC MC p M p
0 $50 $ 0 $-- $ 10 $-- $ - 10 $--
1 45 45 45 60 50 - 15 - 5
2 40 35 115 - 35
3 35 175 60 - 35
4 120 15 65 - 120 - 50
5 25 5 310 - 65
6 20 - 5 75 - 80
A. At what output (Q) level is profit maximized (or losses minimized)? Explain.
B. At what output (Q) level is revenue maximized?
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Solution Summary
Marginal Analysis is clearly explored in this case.
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