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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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See Also This Related BrainMass Solution

Marginal Analysis, Profit Maximization, Marginal Revenue, & Product Marginal Cost

You have been hired to manage a small manufacturing facility, which has cost and production data given in the table below.
Total Total
Workers Labor Cost Output Revenue
1 $500 100 $700
2 1000 280 1150
3 1500 440 1440
4 2000 540 1570
5 2500 600 1670
6 3000 630 1710
7 3500 640 1730
a. What is the marginal product of the second worker?
b. What is the marginal revenue product of the fourth worker?
c. What is the marginal cost of the first worker?
d. Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer.

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