What is the relationship between mr and mc

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Reference no: EM13188331

1. Consider the total profit function
p = TR - TC
= (22 -Q)Q - (10+2Q+Q2 )

a. Create a table that shows Total Revenue, Total Cost and Total Profit, (in your table, let quantity run from 0 to 13 in increments of 1.) Indicate in your table where both total profits and total revenues are maximized
Q TR TC Tp
0
1
2
3
4
5
6
7
8
9
10
11
12
13

b. Next illustrate with a graph on the following page the relationship between TR and TC (Hint set the vertical axis max on your graph at 210)
On your graph,
-highlight the point where total revenues are maximized.
-show how profits may be seen from the TR and TC curves.
-highlight the point where total profits are maximized. What is the relationship between MR and MC at this point?
(Note: Do NOT draw separate lines for MR, MC or profits)

c. Next, create a table showing marginal revenues, marginal costs and marginal profits. Indicate in this table where TOTAL profits are maximized and where TOTAL REVENUES are maximized. (NOTE: You should take derivatives to calculate MR and MC. Again, please let quantity run from 0 to 13 in make increments of 1)

Q MR MC Mp
0
1
2
3
4
5
6
7
8
9
10
11
12
13

d. Finally, construct a graph that illustrates the relationship between marginal revenue and marginal cost. On your graph
show the point where TOTAL profits are maximized
show the point where TOTAL revenues are maximized

Reference no: EM13188331

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