Question 1 Suppose there is only one supplier in the market of product X. The following table shows partial information of product X and the supplier's cost. Marginal Cost Price Quantity $1,700 1,500 1,400 1,300 1,200 1,100 1,000 0 1 380 2 390 3 410 430 5 460 6 500 900 7 550 800 610 8 700 9 770 600 10 790 A. Determine the supplier's profit-maximizing output quantity. Explain your answer. B. At what price should the supplier charge to maximize its profit? Explain your answer. C. Suppose at the profit-maximizing output quantity you have determined in part A, the average variable cost is $428.33 and the average total cost is $628.33. Calculate the total profit at the profit-maximizing output quantity
Question 1 Suppose there is only one supplier in the market of product X. The following table shows partial information of product X and the supplier's cost. Marginal Cost Price Quantity $1,700 1,500 1,400 1,300 1,200 1,100 1,000 0 1 380 2 390 3 410 430 5 460 6 500 900 7 550 800 610 8 700 9 770 600 10 790 A. Determine the supplier's profit-maximizing output quantity. Explain your answer. B. At what price should the supplier charge to maximize its profit? Explain your answer. C. Suppose at the profit-maximizing output quantity you have determined in part A, the average variable cost is $428.33 and the average total cost is $628.33. Calculate the total profit at the profit-maximizing output quantity
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:Question 1
Suppose there is only one supplier in the market of product X. The following table shows
partial information of product X and the supplier's cost.
Marginal Cost
Price
Quantity
$1,700
1,500
1,400
1,300
1,200
1,100
1,000
0
1
380
2
390
3
410
430
5
460
6
500
900
7
550
800
610
8
700
9
770
600
10
790
A. Determine the supplier's profit-maximizing output quantity. Explain your answer.
B. At what price should the supplier charge to maximize its profit? Explain your
answer.
C. Suppose at the profit-maximizing output quantity you have determined in part A,
the average variable cost is $428.33 and the average total cost is $628.33.
Calculate the total profit at the profit-maximizing output quantity
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