(Short-Run Profit Maximization) A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's products is $150. Output FC VC TC TR Proft/Loss 0 $100 $0 _______ ________ ____________ 1 $100 $100 _______ ________ ____________ 2 $100 $180 _______ ________ ____________ 3 $100 $300 ________ ________ ____________ 4 $100 $440 _________ _________ ____________ 5 $100 $600 _________ _________ ____________ 6 $100 $780 _________ _________ ____________ a. Complete the table. b. At what output rate does the firm maximize profit or minimize loss? c. What is the firm's marginal revenue at each positive level of output? Its average revenue? d. What can you say about the relationship between marginal revenue and marginal cost for output rates below the profit-maximizing (or loss-minimizing ) rate? For output rates above the profit-maximizing (or loss-minimizing) rate?
(Short-Run Profit Maximization) A
Output FC VC TC TR Proft/Loss
0 $100 $0 _______ ________ ____________
1 $100 $100 _______ ________ ____________
2 $100 $180 _______ ________ ____________
3 $100 $300 ________ ________ ____________
4 $100 $440 _________ _________ ____________
5 $100 $600 _________ _________ ____________
6 $100 $780 _________ _________ ____________
a. Complete the table.
b. At what output rate does the firm maximize
c. What is the firm's marginal revenue at each positive level of output? Its average revenue?
d. What can you say about the relationship between marginal revenue and marginal cost for output rates below the profit-maximizing (or loss-minimizing ) rate?
For output rates above the profit-maximizing (or loss-minimizing) rate?
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