What is true of the marginal revenue function

Assignment Help Business Economics

Reference no: EM13996809

Using the data developed in Problems 2-2 and2-3.

a. plot the total, average, and marginal functions for both revenue and cost. [Note: Use a two-part graph similar to Figure 2.1 that places the total function in the upper part and the average and marginal functions in the lower half. Also, it is conventional to plot the marginal values at the midpoint between the quantity values to which they relate. For example, the marginal revenue associated with going from two units of output to three units is $150. This value should be plotted midway between the two- and three-unit marks on the quantity (i.e.. horizontal) axis.]

b. What is true of the marginal revenue function at that level of output where total revenue is at a maximum?

c. Determine total profit by subtracting total cost from total revenue at each rate of output. Plot this function in the upper part of your diagram.

d. By comparing the marginal revenue and marginal cost curves and relating them to the profit curve, can you think of a rule the firm might use to determine the output rate that would maximize profit?

Reference no: EM13996809

Questions Cloud

Effective interest rate that the engineer paid for the loan : New engineering graduate student who started a consulting business borrowed money for 1 year to buy necessary equipment and furnishings. The amount of the loan was $16,000, and it had an interest rate of 11% per year. What was the effective interest ..

Describe all four phases of a business cycle : 1. Describe all four phases of a business cycle. 2. Identify and describe three most severe recessions of the 20th century in the United States. 3. What will happen to unemployment and inflation during a recession? Explain

Regarding long-term unemployment : Regarding long-term unemployment, what incentives do you believe the long-term unemployed face with unemployment insurance programs? As part of your answer, make sure to address what impact these programs have on the economy of a country.

Why are externalities referred to as market failures : Why are externalities referred to as "market failures?" Does the market system actually encourage this behavior? Identify two possible solutions to externalities.

What is true of the marginal revenue function : plot the total, average, and marginal functions for both revenue and cost. [Note: Use a two-part graph similar to Figure 2.1 that places the total function in the upper part and the average and marginal functions in the lower half. What is true of th..

Are taxes on wealthy citizens of the united states too high : How much oil conservation (from switching to smaller cars, carpooling, etc.) will a $0.50 per gallon tax on gasoline achieve? Are taxes on wealthy citizens of the United States too high?

Sketch a simple supply-demand graph for sunflower : Sketch a simple supply-demand graph for sunflower, with price on the vertical axis and quantity on the horizontal axis. Don’t worry about quantities or slopes, but make sure demand has negative slope, supply has positive slope, and the two lines cros..

Explain the factors that cause an increase in demand : List and explain the factors that cause an increase in demand (i.e., shift the demand curve to the right). If price is or is not one of these factors, explain why? List and explain the factors that cause an increase in supply ( i.e., shift the supply..

Define carefully what is meant by demand schedule or curve : Define carefully what is meant by a demand schedule or curve. State the law of downward-sloping demand. Illustrate the law of downward-sloping demand with two cases from you own experience.

User Account

All Pages