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Marginal Cost/Revenue, Profit Help
Hello,
I was wondering if someone could tell me if I answered the questions correctly?
2a.) Does each profit function seem to have a maximum value? If so, identify it in your table.
Yes, each profit does have a maximum value. The profit fot Table A is 14090 and for Table B it is 167164.5.
2b.) For each profit function, what are the values of marginal cost and marginal revenue at the x-value where the profit has its maximum?
Table A: Table B:
Marginal Cost: 3 Marginal Cost: 248.9
Marginal Revenue: 2.2 Marginal Revenue:246.1
2c.) If a profit function has a maximum value at x=a, what seems to be the relationship between the values of marginal cost and marginal revenue at x=a? Answer in a summary sentence.
If a profit function has a maximum value at x=a, the relationship between marginal cost and marginal revenue is that they are the same. Profit will be 0.
3a.) In general, if MR > MC, is P(x) increasing or decreasing? Justify your choice, use the interpretation of marginals as predictors for the next unit.
In general, if MR >MC, P(x) is increasing. If more units are produced, profit will go down.
3b.) If MR < MC, is P(x) increasing or decreasing? Justify your choice.
If MR < MC, P(x) is decreasing. One more unit produced will result in a loss.
3c.) Explain how the observations in (a) and (b) provide general support for your statement relating the occurrence of maximum profit to the values of marginal cost and marginal revenue?
The observations in (a) and (b) provide general support because as more units are produced, the value is getting closer to 0, in which I said profit will be 0.