1. A firm's total cost schedule and the demand for its product are summarized in the table below. Revenues Quantity Produced 0 units 1 2 3 4 5 6 7 Costs Total Cost $0 70 142 217 297 385 485 603 Marginal Cost Quantity Demanded 0 units 1 3 Price $155 per unit 150 145 140 135 130 125 120 Total Marginal Revenue Revenue (1) Complete the table and use the equimarginal principle to determine the level of output that maximizes the firm's profit. Also determine the price charged by the firm and its maximum profit level. (ii) What would happen to your answers from part (1) if the firm's total costs rose by $40? (iii) What would happen to your answers from part (i) if its costs rose by $40 per unit produced?
1. A firm's total cost schedule and the demand for its product are summarized in the table below. Revenues Quantity Produced 0 units 1 2 3 4 5 6 7 Costs Total Cost $0 70 142 217 297 385 485 603 Marginal Cost Quantity Demanded 0 units 1 3 Price $155 per unit 150 145 140 135 130 125 120 Total Marginal Revenue Revenue (1) Complete the table and use the equimarginal principle to determine the level of output that maximizes the firm's profit. Also determine the price charged by the firm and its maximum profit level. (ii) What would happen to your answers from part (1) if the firm's total costs rose by $40? (iii) What would happen to your answers from part (i) if its costs rose by $40 per unit produced?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 11RQ: What is die difference between accounting and economic profit?
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![1.
A firm's total cost schedule and the demand for its product are summarized in the table below.
Revenues
Quantity
Produced
0 units
1
3446WN.
2
5
7
Costs
Total
Cost
$0
70
142
217
297
385
485
603
Marginal
Cost
Problem Set 3
Quantity
Demanded
0 units
1
2
3
Price
$155 per unit
150
145
140
135
130
125
120
Total
Revenue
Marginal
Revenue
(i) Complete the table and use the equimarginal principle to determine the level of output that maximizes the
firm's profit. Also determine the price charged by the firm and its maximum profit level.
(ii) What would happen to your answers from part (i) if the firm's total costs rose by $40?
(iii) What would happen to your answers from part (i) if its costs rose by $40 per unit produced?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01ac07b9-94d3-4bc1-91b7-721d4ce1d107%2F672b5989-a140-4bf4-aac3-17bb0dcf76de%2Fcni3fld_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1.
A firm's total cost schedule and the demand for its product are summarized in the table below.
Revenues
Quantity
Produced
0 units
1
3446WN.
2
5
7
Costs
Total
Cost
$0
70
142
217
297
385
485
603
Marginal
Cost
Problem Set 3
Quantity
Demanded
0 units
1
2
3
Price
$155 per unit
150
145
140
135
130
125
120
Total
Revenue
Marginal
Revenue
(i) Complete the table and use the equimarginal principle to determine the level of output that maximizes the
firm's profit. Also determine the price charged by the firm and its maximum profit level.
(ii) What would happen to your answers from part (i) if the firm's total costs rose by $40?
(iii) What would happen to your answers from part (i) if its costs rose by $40 per unit produced?
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