Question

Table 14-9 Suppose that a firm in a competitive market faces the following revenues and costs: Quantity 0 Total Revenue $0 $8
0 0
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Answer #1

Answer

MR=P=$8 as the total revenue increasing by a constant amount so the MR=P

P=TR/Q=8/1=16/2=8 and so on

===========

MC(n)=TC(n)-TC(n-1)
MC(n)=marginal cost of n th unit
TC(n)=Total cost of n units of output
MC(1)=9-5=4 and so on

Q TR TC MR MC Profit
0 0 5 -5
1 8 9 8 4 -1
2 16 14 8 5 2
3 24 20 8 6 4
4 32 27 8 7 5
5 40 35 8 8 5
6 48 44 8 9 4
7 56 54 8 10 2
8 64 65 8 11 -1
9 72 72 8 7 0

the firm produces at MR=MC

where

Q=5 units

Option D

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