Answer Happy

2. Problems and Applications Q3 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.) Total Cost Marginal Cost Quantity (Dollars) (Dollars) Total Revenue (Dollars) Marginal Revenue (Dollars) Profit (Dollars) 0 5 0 1 6 6 2 8 12 3 11 18 4 15 24 5 20 30 6 26 36 7 35 42 In order to maximize profit, how many units should the firm produce? Check all that apply. 4 5 6 7
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).) (? 10 9 Marginal Revenue Marginal Cost Revenue and Costs 8 7 1 0 0 1 2 3 4 5 6 7 Quantity The marginal-revenue curve and the marginal-cost curve cross at a quantity This firm in a competitive industry, because marginal revenue is The industry in a long-run equilibrium. as quantity increases.