Transcript Problem 3 - Economics

Problem #3
Q
P
TC
0
225,000+
200,000
1
225,000
250,000
2
175,000
275,000
3
150,000
325,000
4
125,000
400,000
5
90,000
500,000
a. What is the MR if output rises from 2 to 3 units?
What is the MC if output rises from 4 to 5 units?
b. What quantity should Titan produce to maximize TR?
Total profit?
c. What is TFC?
How do Titan’s MC behave as output increases? Explain.
Problem #4
Q
MR
MC
What is the profit-maximizing level of Q?
10
30
25
29
23
27
22
25
25
23
27
21
29
19
31
11
12
13
14
15
16
17
Problem #6
At its best possible output level, a firm has total revenue of $3,500
per day and total cost of $7,000 per day. What should this firm do
in the short run if:
a. The firm has total fixed costs of $3,000 per day?
b. The firm has total variable costs of $3,000 per day?