3. Problems and Applications Q3 Consider total cost and total revenue, given in the following table: Marginal Cost Total Revenue Quantity (Dollars) (Dollars) In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Total Cost (Dollars) Profit (Dollars) Marginal Revenue (Dollars) 0 5 0 1 6 6 2 8 12 3 11 18 4 15 24 5 20 30 6 26 36 7 35 42 In order to maximize profit, how many units should the firm produce? Check all that apply. 45 6 ☐ 7 In the previous table, enter marginal revenue and marginal cost for each quantity. On the following graph, use the green points (triangle symbol) to graph the marginal-revenue curve, then use the orange points (square symbol) to plot the marginal-cost curve. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 unit to 2 units is $5, then you would plot a point at (1.5, 5).) Revenue and Costs 10 9 8 1 0 0 1 2 3 4 5 6 7 Quantity Marginal Revenue Marginal Cost The marginal-revenue curve and the marginal-cost curve cross at a quantity ? This firm in a competitive industry, because marginal revenue is as quantity increases. The industry in a long-run equilibrium.
3. Problems and Applications Q3 Consider total cost and total revenue, given in the following table: Marginal Cost Total Revenue Quantity (Dollars) (Dollars) In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.) Total Cost (Dollars) Profit (Dollars) Marginal Revenue (Dollars) 0 5 0 1 6 6 2 8 12 3 11 18 4 15 24 5 20 30 6 26 36 7 35 42 In order to maximize profit, how many units should the firm produce? Check all that apply. 45 6 ☐ 7 In the previous table, enter marginal revenue and marginal cost for each quantity. On the following graph, use the green points (triangle symbol) to graph the marginal-revenue curve, then use the orange points (square symbol) to plot the marginal-cost curve. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 unit to 2 units is $5, then you would plot a point at (1.5, 5).) Revenue and Costs 10 9 8 1 0 0 1 2 3 4 5 6 7 Quantity Marginal Revenue Marginal Cost The marginal-revenue curve and the marginal-cost curve cross at a quantity ? This firm in a competitive industry, because marginal revenue is as quantity increases. The industry in a long-run equilibrium.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:3. Problems and Applications Q3
Consider total cost and total revenue, given in the following table:
Marginal Cost
Total Revenue
Quantity
(Dollars)
(Dollars)
In the final column, enter profit for each quantity. (Note: If the firm suffers a loss, enter a negative number in the appropriate cell.)
Total Cost
(Dollars)
Profit
(Dollars)
Marginal Revenue
(Dollars)
0
5
0
1
6
6
2
8
12
3
11
18
4
15
24
5
20
30
6
26
36
7
35
42
In order to maximize profit, how many units should the firm produce? Check all that apply.
45
6
☐ 7
In the previous table, enter marginal revenue and marginal cost for each quantity.
On the following graph, use the green points (triangle symbol) to graph the marginal-revenue curve, then use the orange points (square symbol) to
plot the marginal-cost curve. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing
production from 1 unit to 2 units is $5, then you would plot a point at (1.5, 5).)
Revenue and Costs
10
9
8
1
0
0
1
2
3
4
5
6
7
Quantity
Marginal Revenue
Marginal Cost
The marginal-revenue curve and the marginal-cost curve cross at a quantity
?
This firm
in a competitive industry, because marginal revenue is
as quantity increases.
The industry
in a long-run equilibrium.
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