Question

Hello, I need help with this. Would it be 1 to 0?

The data in the following table give information about the price P (in dollars) for which a firm can sell a unit of output and the total cost of production, where quantity is q, total cost is C, marginal cost is MC, total revenue is R, marginal revenue is MR, and profit is n. Fill in the blanks in the following table. (Enter your responses using integers.) P = 50 a CMCR MR P = 44 MR R 1 - 100 - 100 -100 15050 - 106 178 28 - 78 200 176 250 220 264 7 8 272 310 300 350 308 400 450 410 475 352 396 440 484 500 550 Show what happens to the firm's output choice and profit if the price of the product falls from $50 to $44. If the market price falls from $50 to $44, then the firm's output will decrease from units to units. (Enter your responses using integers.)

Answer 1

Profit maximizing condition is P=MR=MC.

When P= $50 , then firm's profit maximizing output = 9 units because when Q=1 , MR=MC but we do not consider the downward sloping portion of the MC curve , to see the profit maximizing output ,we should see the upward sloping portion of the MC curve which depicts firm's supply . So, we can see that when Q=9 units , MR>MC and when Q=10 units , MR<MC . Therefore, when P=$50 , firm's output = 9 units.

And When P=$44 , then firm's profit maximizing output = 8 units because when Q=8 units , MR>MC and when Q=9 units ,MR <MC. So, profit maximizing output is 8 units.

Hence, if the market price falls from $50 to $44 , then the firm's output will decrease from 9 units to 8 units.