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$28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal cost of $31. a. Help your friend to calculate his monthly total revenue and marginal revenue at each quantity by copying and completing the above table. b. To maximize profit, what quantity should your friend produce per month? What price should he charge? c. Someone told your friend that he should instead produce 400 units of the good. Do you agree? Explain to your friend why he should or should not do this.

$28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal cost of $31. a. Help your friend to calculate his monthly total revenue and marginal revenue at each quantity by copying and completing the above table. b. To maximize profit, what quantity should your friend produce per month? What price should he charge? c. Someone told your friend that he should instead produce 400 units of the good. Do you agree? Explain to your friend why he should or should not do this.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Your friend decides to travel abroad to a popular destination to operate a business. He is faced with the following monthly demand schedule: | Total Revenue | Marginal revenue Price per unit $50 |Quantity 100 $46 200 $41 300 $35 400 $28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal cost of $31. a. Help your friend to calculate his monthly total revenue and marginal revenue at each quantity by copying and completing the above table. b. To maximize profit, what quantity should your friend produce per month? What price should he charge? c. Someone told your friend that he should instead produce 400 units of the good. Do you agree? Explain to your friend why he should or should not do this.
Transcribed Image Text:Your friend decides to travel abroad to a popular destination to operate a business. He is faced with the following monthly demand schedule: | Total Revenue | Marginal revenue Price per unit $50 |Quantity 100 $46 200 $41 300 $35 400 $28 500 $20 600 $11 700 He has a total fixed cost of $2000 per month and has a constant marginal cost of $31. a. Help your friend to calculate his monthly total revenue and marginal revenue at each quantity by copying and completing the above table. b. To maximize profit, what quantity should your friend produce per month? What price should he charge? c. Someone told your friend that he should instead produce 400 units of the good. Do you agree? Explain to your friend why he should or should not do this.
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