Consider total cost and total revenue, given in the following table:

In the final column, enter profit for each quantity. ( Note : If the firm suffers a loss, enter a negative number in the appropriate cell.)

Quantity	Total Cost	Marginal Cost	Total Revenue	Marginal Revenue	Profit
	(Dollars)	(Dollars)	(Dollars)	(Dollars)	(Dollars)
0	6		0
1	8		7
2	10		14
3	13		21
4	17		28
5	24		35
6	32		42
7	42		49

In order to maximize profit, how many units should the firm produce? Check all that apply.

3

4

5

6

In the previous table, enter marginal revenue and marginal cost for each quantity.

On the following graph, use the green points (triangle symbol) to graph the marginal-revenue curve, then use the orange points (square symbol) to plot the marginal-cost curve. ( Note : Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 unit to 2 units is $5, then you would plot a point at (1.5, 5).)

The marginal-revenue curve and the marginal-cost curve cross at a quantity ( IS 4, <4, >4, IS 5, or BETWEEN 5 & 6 ) .

This firm ( IS NOT or IS ) in a competitive industry, because marginal revenue is ( INCREASING, DECREASING, or CONSTANT ) as quantity increases.

True or False: The industry is not in a long-run equilibrium.

True

False

Transcribed Image Text:

Revenue and Costs 10 9 8 7 3 2 1 0 0 1 2 3 4 50 9 7 Marginal Revenue Marginal Cost Revenue and Costs 10 9 8 7 3 2 1 0 0 1 2 3 4 50 9 7 Marginal Revenue Marginal Cost

Answer rating: 100% (QA)

Marginal revenue The total revenue can be calculated by using the equation n as follows Marginal rev... View the full answer