Calculate average total cost marginal cost and total revenue

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Assignment

Suppose that you are an owner of a company that produce a special weight-loss over-the-counter medicine in a monopolistically competitive industry. The demand and the total cost for your medicine per day are given by the following table.

Quantity Demanded

Price

Total Cost

1

68

70

2

66

80

3

64

85

4

62

90

5

60

100

6

58

115

7

56

136

8

54

164

9

52

200

10

50

245

a. Calculate Average Total Cost, Marginal Cost, Total Revenue, Marginal Revenue, and Profit for each bottle of the medicine produced.

b. How many bottles of this medicine should you produce in order to maximize profit, and what are the market price and the corresponding profit?

c. Suppose that you pay for an advertising flyer for a $100 flat fee and after that the demand for the medicine increases (see the table below for the new demand information). How do your answers in parts a. and b. change?

Quantity Demanded

Price

3

68

4

66

5

64

6

62

7

60

8

58

9

56

10

54

11

52

12

50

Reference no: EM131130871

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