1. The following data are price/quantity/cost combinations for Titan Industry's mainframe computer division: Quantity Units Price Total Cost of Per unit, $ Production, $ above 225,000 200,000 250,000 275,000 325,000 400,000 500,000 1 225,000 2 175,000 150,000 125,000 90,000 4. a. What is the marginal revenue if output rises from 2 to 3 units? (hint: calculate total revenue at each output level first)). What is the marginal cost if output rises from 4 to 5? Show your work. b. What quantity should Titan produce to maximize total profit? Show your work. What is Titan's fixed cost? How do Titan's marginal costs behave as output increases? Be C. specific.
1. The following data are price/quantity/cost combinations for Titan Industry's mainframe computer division: Quantity Units Price Total Cost of Per unit, $ Production, $ above 225,000 200,000 250,000 275,000 325,000 400,000 500,000 1 225,000 2 175,000 150,000 125,000 90,000 4. a. What is the marginal revenue if output rises from 2 to 3 units? (hint: calculate total revenue at each output level first)). What is the marginal cost if output rises from 4 to 5? Show your work. b. What quantity should Titan produce to maximize total profit? Show your work. What is Titan's fixed cost? How do Titan's marginal costs behave as output increases? Be C. specific.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. The following data are price/quantity/cost combinations for Titan Industry's mainframe computer
division:
Quantity
Units
Price
Total Cost of
Per unit, $
Production, $
above 225,000
225,000
175,000
200,000
250,000
275,000
325,000
400,000
500,000
1
2
3.
150,000
4
125,000
90,000
What is the marginal revenue if output rises from 2 to 3 units? (hint: calculate total revenue at
each output level first)). What is the marginal cost if output rises from 4 to 5? Show your work.
b. What quantity should Titan produce to maximize total profit? Show your work.
a.
С.
What is Titan's fixed cost? How do Titan's marginal costs behave as output increases? Be
specific.
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