Lefola Limited is the only manufacturer of product G_Easy in the Popa Land. It has provided documented levels of demand at certain selling prices for product G_Easy which are as follows: Price per unit Demand Units Total costs 7 000 0 3 000 6 000 1 5 000 5 000 2 8 000 4 000 3 12 000 3 000 4 17 000 2 000 5 23 000 1 000 6 30 000 Required: Using a tabular approach, calculate the marginal revenues and marginal costs for product G_Easy at the different levels of demand, and so determine the selling price at which Lefola Limited’s profits are maximized.
Lefola Limited is the only manufacturer of product G_Easy in the Popa Land. It has provided documented levels of demand at certain selling prices for product G_Easy which are as follows: Price per unit Demand Units Total costs 7 000 0 3 000 6 000 1 5 000 5 000 2 8 000 4 000 3 12 000 3 000 4 17 000 2 000 5 23 000 1 000 6 30 000 Required: Using a tabular approach, calculate the marginal revenues and marginal costs for product G_Easy at the different levels of demand, and so determine the selling price at which Lefola Limited’s profits are maximized.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Lefola Limited is the only manufacturer of product G_Easy in the Popa Land. It has provided documented levels of
|
|
Demand Units |
Total costs |
|
7 000 |
0 |
3 000 |
|
6 000 |
1 |
5 000 |
|
5 000 |
2 |
8 000 |
|
4 000 |
3 |
12 000 |
|
3 000 |
4 |
17 000 |
|
2 000 |
5 |
23 000 |
|
1 000 |
6 |
30 000 |
Required:
Using a tabular approach, calculate the marginal revenues and marginal costs for product G_Easy at the different levels of demand, and so determine the selling price at which Lefola Limited’s profits are maximized.
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