Question

complete the following table by computing the total cost of producing each quantity. then compute the total revenue earned at each price level and the marginal revenue earned at each price

Chi Analysis Questions (Ch 11) 7. Critical analysis 014 Suppose that you produce and sell children's tables in a local market. Past experience enables you to estimate your demand and marginal cost Schedules. This information is presented in the accompanying table. Complete the following table by computing the total cost of producing each quantity. Then, compute the total revenue earned at each price level and the marginal revenue eamed at each price level Price (s per table) Quantity Demanded (1ables per Week) Fixed Cost (S) Total Cost Marginal Cost Total Revenue Revenue Ra Assuming you are currently charging $25 per table set, what should you do if you want to increase Increase the price O Decrease the price O Leave the price unchanged Given your demand and cost estimates, you should charge a price of tables, and you will earn a weekly profit of $ you wa your weekly profit. At this price, your output will Grade It Now Save & Continue Cobra without saving to search O Re PM 991

Answer 1

Ans:

Price ( $ per table)	Quantity Demanded (Tables per Week)	Fixed Cost ( $)	Total Cost ( $)	Marginal Cost ( $)	Total Revenue ( $)	Marginal Revenue ( $)
40	1	40	65	--	40	--
35	2	40	70	5	70	30
30	3	40	81	11	90	20
25	4	40	99	18	100	10
20	5	40	125	26	100	0
15	6	40	160	35	90	-10

Explanation:

Marginal Cost = change in total cost / change in quantity

Total revenue = Price * quantity

Marginal revenue = Change in total revenue / change in quantity

Ans: Increase the price

Ans: Given your demand and cost estimates, you should charge a price of $30 if you want to maximize your weekly profit. At this price, your output will be 3 tables, and you will earn a weekly profit of $9.

Explanation:

Under monopoly or monopolistic market structure , the profit maximization condition is where marginal revenue equals marginal cost ( MR = MC ) or at the profit maximizing level of output , marginal revenue must be greater than marginal cost ( MR > MC).

It is cleared from the below table , the profit maximizing level of output is 3 tables where MR > MC. After this level of output , MC exceeds MR.

Price ( $ per table)	Quantity Demanded (Tables per Week)	Fixed Cost ( $)	Total Cost ( $)	Marginal Cost ( $)	Total Revenue ( $)	Marginal Revenue ( $)	Profit ( $)
40	1	40	65	--	40	--	-25
35	2	40	70	5	70	30	0
30	3	40	81	11	90	20	9
25	4	40	99	18	100	10	1
20	5	40	125	26	100	0	-25
15	6	40	160	35	90	-10	-70