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Output per day: 0 1 2 3 4 5 6 7 8 9 Total cost: 10
Output per day: 0 1 2 3 4 5 6 7 8 9
Total cost: 10.00 20.50 24.50 28.50 34.00 43.0 55.50 72.00 93.00 119.00
Suppose the current equilibrium price in the basketball market is $12.50. To maximize profit, how many basketballs will Andy produce, what price will he charge, and how much profit will he make?
It would be great if you could show me how you solve this problem with the table which includes Output per day, Total cost, Marginal Cost, Total revenue, Marginal revenue, and profit.
Expert Solution
Equilibrium is the point where following two condition are satisfied which are as follows :
(i) MR = MC , and
(ii) after the point of equilibrium MC is Increasing.
So, At Production of 6 units , MR = MC and also after that MC is increasing.
So,
In this case, that profit-maximising quantity level is 6 units. The profit is $19.5.
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