Question

Refer to the above data. At its profit-maximizing output, this firm's total revenue will be:______

Answer 1

Answer:

The question is incomplete. The complete is given below

OUTPUT PRICE MR TC MC

1                  100         100 100 30

2                     90 80 63 26

3                    80 60 52.67 32

4                     70 40 49.5 40

5                    60 20 49.6 50

6                      50 0 50 52

7                    40 -20 52.29 66

8                    30 -40 55.75 80

9                    20 -60 60.67 100

The total revenue is $280

Explanation:

Profit is maximized at the level of output where marginal revenue (MR) is equal marginal cost (MC).

Marginal revenue is the extra revenue made from selling one additional unit of a product. It is the increase in total revenue as result of selling one more unit. It is given in the third column above.

Marginal cost: It is the increase in total cost as a result  of producing extra one unit- it is given in the last column

Profit maximizing-output: The optimal level of output where marginal revenue is equal to marginal cost. It is the ascertained to be 4 under the first column above. At this level  MR $40 = MC $40

Profit maximizing price:  The selling price at the profit-maximizing output. It is $70 here.

Total revenue that maximized profit= profit-maximizing price × Profit maximizing-output

$70 × 4= $280