Liz's T-Shirts
Liz produces t-shirts. From the consumers' perspective, her t-shirts are not different from other t-shirts of this kind offered by many other sellers. The going market price of a t-shirt is $7. Liz's total variable costs are shown in the table below. Her total fixed cost is $10 per day.
In the scenario above, what price should Liz charge ($ per t-shirt)?
In the scenario above, what is Liz's marginal revenue from the fifth t-shirt ($)?
In the scenario above, what is the marginal cost of the sixth t-shirt ($)?
In the scenario above, how many t-shirts should Liz produce to get the highest profit? (Enter a whole number.)
In the scenario above, when Liz produces the optimal quantity of t-shirts, what is her profit ($)?
In the scenario above, when Liz produces the optimal quantity of t-shirts, how much profit does she make per t-shirt ($)?
FC=10
TC=TVC+TFC
MC=change in TC
TR=P*Q
MR = change in TR
Profit = TR-TC
Q | TVC | TFC | TC | MC | TR | MR | PROFIT |
1 | 4.8 | 10 | 14.8 | 7 | -7.8 | ||
2 | 9.55 | 10 | 19.55 | 4.75 | 14 | 7 | -5.55 |
3 | 14.4 | 10 | 24.4 | 4.85 | 21 | 7 | -3.4 |
4 | 19.5 | 10 | 29.5 | 5.1 | 28 | 7 | -1.5 |
5 | 25 | 10 | 35 | 5.5 | 35 | 7 | 0 |
6 | 31.05 | 10 | 41.05 | 6.05 | 42 | 7 | 0.95 |
7 | 37.8 | 10 | 47.8 | 6.75 | 49 | 7 | 1.2 |
8 | 45.4 | 10 | 55.4 | 7.6 | 56 | 7 | 0.6 |
a) Price charged = 7
b) MR from 5th shirt = 7
c) MC of 6th shirt = 6.05
d) Liz should produce 7 shirts to get the highest profit
e) Profit = 1.2
f) Profit per shirt = 1.2/7 = 0.17
Liz's T-Shirts Liz produces t-shirts. From the consumers' perspective, her t-shirts are not different from other...
Liz produces t-shirts. From the consumers' perspective, her t-shirts are not different from other t-shirts of this kind offered by many other sellers. The going market price of a t-shirt is $7. Liz's total variable costs are shown in the table below. Her total fixed cost is $10 per day. In the scenario above, what price should Liz charge ($ per t-shirt)? In the scenario above, what is Liz's marginal revenue from the fifth t-shirt ($)? In the scenario above,...
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