The profit maximizing quantity = 80
Because, at this level of quantity of output, marginal revenue equals marginal cost. So, it is profit maximizing quantity. It is exhibited in following table.
Price | quantity | Total Revenue | Marginal revenue | marginal cost |
6.8 | 50 | 340 | --- | 0.8 |
6.2 | 60 | 372 | 3.2 | 0.8 |
5.6 | 70 | 392 | 2 | 0.8 |
5 | 80 | 400 | 0.8 | 0.8 |
4.4 | 90 | 396 | -0.4 | 0.8 |
3.8 | 100 | 380 | -1.6 | 0.8 |
QUESTION 9 Jimmy is the owner of the only gelato shop on North Stradbroke lsland. He...
QUESTION 9 Jimmy is the owner of the only gelato shop on North Stradbroke lsland. He sells the gelato in cones, with the marginal cost of each gelato cone being constant at $0.80 per cone. Below is a table of potential prices and corresponding quantities of gelato cones he could sell. Quantity (cones) 50 60 70 80 90 100 Price ($/cone) 6.80 6.20 5.60 5.00 4.40 3.80 What is Jimmy's profit-maximising quantity of cones? Answer to the nearest whole number...