Table: Spring WaterQuantity(Cases)PriceTotalRevenueMarginalRevenueMarginalCostAverageTotalCostTotal Cost0$16$0 $25 $15$10 1$15$15 35.00$35 $13$6 2$14$28 20.50$41 $11$4 3$13$39 15.00$45 $9$2 4$12$48 11.75$47 $7$3 5$11$55 10.00$50 $5$3 6$10$60 8.83$53 $3$5 7$9$63 8.29$58 $1$9 8$8$64 8.38$67Reference: Ref 15-12 Table: Spring WaterTable: Spring Water. The table shows the demand and cost data for a firm in a monopolistically competitive industry producing drinking water from underground springs. The profit-maximizing output is _____ cases.Select one:a. 7b. 5c. 6d. 8

The profit-maximizing output is the level of output when profit is maximum.Formula:Profit=Total Revenue-Total costLet us calculate the profit of each option: (a) When output is 7Profit=TR-TCProfit=63--58Profit=$5(b) When output is 5Profit=55-50Profit=$5(c) When output is 6Profit=60-53Profit=$7(d) When output is 8Profit=64-67Profit=$-3The profit is maximum $7 when the output is 6. Answer) c. 6

Answered: Quantity (Cases) Price Total Revenue…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table: Spring Water

Quantity (Cases)	Price	Total Revenue	Marginal Revenue	Marginal Cost	Average Total Cost	Total Cost
0	$16	$0				$25
			$15	$10
1	$15	$15			35.00	$35
			$13	$6
2	$14	$28			20.50	$41
			$11	$4
3	$13	$39			15.00	$45
			$9	$2
4	$12	$48			11.75	$47
			$7	$3
5	$11	$55			10.00	$50
			$5	$3
6	$10	$60			8.83	$53
			$3	$5
7	$9	$63			8.29	$58
			$1	$9
8	$8	$64			8.38	$67

Reference: Ref 15-12 Table: Spring Water

Table: Spring Water. The table shows the demand and cost data for a firm in a monopolistically competitive industry producing drinking water from underground springs. The profit-maximizing output is _____ cases.

Select one:

a. 7

b. 5

c. 6

d. 8

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