# B problems 1 a the total average and marginal revenue

• Notes
• 3
• 89% (28) 25 out of 28 people found this document helpful

This preview shows page 2 - 3 out of 3 pages.

marginal revenue of the program equals its marginal cost. b. Problems: 1. ( a ) The total, average, and marginal revenue schedules are Q TR= 9Q-Q 2 AR MR 0 0 -- -- 1 8 8 8 2 14 7 6 3 18 6 4 4 20 5 2 5 20 4 0 6 18 3 -2 7. The average and marginal cost schedules are Q TC AC MC 0 1 -- -- 1 12 12 11 2 14 7 2 3 15 5 1 4 20 5 5 9. Q TR TC Profit

Subscribe to view the full document.

1 8 12 -4 2 14 14 0 3 18 15 3 4 20 20 0 The profit-maximizing level of output is Q = 3. Froeb and McCann’s chapter 4: a. Individual problems: 4-2 The marginal revenue of the running shoes is less than the marginal benefit [\$55<\$60]. For the tennis shoes, the marginal revenue is greater than the marginal benefit [\$55>\$45]. Thus, the shoe company should sell the tennis shoes to the Chinese retailer, but refuse to sell the running shoes at that price. 4-4 This is an extent decision, so we have to measure the marginal benefit of adding a copier and the marginal benefit of adding a worker. The marginal productivity of a copier is 50,000 pages per day (100,000 pages/2 copiers). The marginal productivity of a worker is 10,000 pages per day (50,000 pages/5 workers). An extra copier will add five times much as an extra worker, but will cost less than five times as much. Buy a copier.
• Spring '13
• GeorgeYoung

{[ snackBarMessage ]}

###### "Before using Course Hero my grade was at 78%. By the end of the semester my grade was at 90%. I could not have done it without all the class material I found."
— Christopher R., University of Rhode Island '15, Course Hero Intern

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern