Children tables in a local market

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Reference no: EM131293009

Suppose that you produce and sell children's tables in a local market. Past experience enables you to estimate your demand and marginal cost schedules. This information is presented in the accompanying table. 

1. Fill in the missing revenue and cost schedules. (Hint: Variable cost of producing the first  unit of output is its marginal cost($50); now you can calculate total variable cost of  producing 2 units, 3 units, --- etc by adding the marginal cost of producing one more unit.)

2. Assuming you are currently charging $55 per table set, what should you do if you want to maximize profits?

3. Given your demand and cost estimates, what price should you charge if you want to maximize your weekly profit? What output should you produce? What is your maximum weekly profit? 

Price

Quantity Demanded (per Week)

Marginal Cost           

Total Revenue

Marginal Revenue

 Fixed  Cost

Total Cost

$60

1

$50



$40


55

2

20





50

3

24





45

4

29





40

5

35





35

6

45





 

Reference no: EM131293009

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