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Maria manages a bakery, that specializes in aabatta bread, and has the following information on demand and costs Ciabatta Bread Sold Per Hour (Q) Price (P) Total Cost (TC) S600 550 82 50 600 2 500 850 3 450 10 50 4 400 12 00 5 350 13 00 6 300 13 50 7 250 14 50 8 200 16 50 a
Maria manages a bakery, that specializes in aabatta bread, and has the following information on demand and costs Ciabatta Bread Sold Per Hour (Q) Price (P) Total Cost (TC) S600 550 82 50 600 2 500 850 3 450 10 50 4 400 12 00 5 350 13 00 6 300 13 50 7 250 14 50 8 200 16 50
a. To maximize profits, Maria should sell loaves of aabatta bread per hour (Enter your response as an integer)
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Matta should charge a price of . (Enter your response rounded to two decimal place Ques Mana's maximum profit is $11] (Enter your response rounded to hvo decimal places.) 'n 'ewer b. The marginal revenue when selling the profit-maximizing number of loaves of aabatta bread is $O. (Enter your response rounded to two decimal places.) The marginal cost when selling the profit-maximizing number of loaves of ciabatta bread is SL. (Enter your response rounded to two decimal places)
Expert Solution
| Q | P($) | TC($) | MC($) | TR($) | MR($) | Profit($) |
| 0 | 6 | 2.5 | - | 0 | - | -2.5 |
| 1 | 5.5 | 6 | 3.5 | 5.5 | 5.5 | -0.5 |
| 2 | 5 | 8.5 | 2.5 | 10 | 4.5 | 1.5 |
| 3 | 4.5 | 10.5 | 2 | 13.5 | 3.5 | 3 |
| 4 | 4 | 12 | 1.5 | 16 | 2.5 | 4 |
| 5 | 3.5 | 13 | 1 | 17.5 | 1.5 | 4.5 |
| 6 | 3 | 13.5 | 0.5 | 18 | 0.5 | 4.5 |
| 7 | 2.5 | 14.5 | 1 | 17.5 | -0.5 | 3 |
| 8 | 2 | 16.5 | 2 | 16 | -1.5 | -0.5 |
Marginal Cost = Change in Total Cost/Change in Total Quantity
Marginal Revenue = Change in Total Revenue/Change in Total Quantity
Total Revenue = Price*Quantity
Profit = Total Revenue - Total Cost
a) To maximize profit, the firm should produce at MR=MC or the closet lower MC.
So, Maria should sell 6 loaves of ciabatta bread per hour.
Maria should charge a price of $3.
Maria's minimum profit is $4.5
b) The marginal revenue when selling the profit maximizing number of loaves is 0.5
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