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