Andrea’s Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The first two columns in Table 10.5 provide the price and quantity for the demand curve for treatments. The third column shows its total costs. For each level of output, calculate total revenue, marginal revenue, average cost, and marginal cost. What is the profit-maximizing level of output for the treatments and how much will the firm earn in profits?

Table 10.5

Transcribed Image Text:

Price $25.00 $24.00 $23.00 $22.50 $22.00 $21.60 $21.20 0 10 20 30 40 50 60 Quantity TC $130 $275 $435 $610 $800 $1,005 $1,225