You are an economic consultant and encounter a firm with the following data:
|
Quantity of Labor |
Fixed Costs |
Variable Costs |
Total Costs |
Quantity |
Marginal Costs |
|
5 |
$150 |
20 |
|||
|
6 |
$150 |
28 |
|||
|
7 |
$150 |
34 |
|||
|
8 |
$150 |
38 |
The wage rate is $8 per unit. Fill in the rest of the table.
The price-quantity combination is as follows:
Fill in the rest of the table
|
Price |
Quantity |
TR |
MR |
|
$10.50 |
20 |
||
|
$9.24 |
28 |
||
|
$7.87 |
34 |
||
|
$6.33 |
38 |
What is the profit-maximizing price and quantity and what is
the profit at that point?
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