At what output rate does the firm maximize profit

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Reference no: EM13207185

Short run profit maximization A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm's product is $150.

TC=VC+FC TR=output*150 profit=TR-TC

Output 0, FC $100, VC $0, TC 100, TR 0 Profit /Loss -100
output 1, FC $100, VC $100, TC 200 TR 150, Profit/loss -50
output 2, FC $100, VC $180, TC280, TR300, Profit/loss20
output 3, FC $100, VC $300, TC400, TR450, Profit/loss50
output 4, FC $100, VC $440, TC540, TR600, Profit/loss60
output 5, FC $100, VC $600, TC700, TR750, profit/loss50
output 6, FC $100, VC $780, TC880, TR900, profit/loss20

a. Complete the table
b. At what output rate does the firm maximize profit or minimize loss?
c. What is the firm's marginal revenue at each positive rate of output? Its average revenue?
d. What can you say about the relationship between marginal revenue and marginal cost for output rates below the profit-maximizing (or loss-minimizing) rate? For output rates above the profit-maximizing (or loss-minimizing) rate?

Reference no: EM13207185

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