Ok, so I've been stuck on this problem for who knows how long and I don't understand at all. The problem is for number 25, however I feel I will have gotten 21-24 wrong also if I can't solve 25 from what I have. This is what the question is:


My answers for 21-24:
21. 0
22. 500
23. 700
24. 1800

Just so you know what I have (at least for an idea), my q=1 is the following lines
Q=1
P=800
TR=800
MR=800
TFC=900
TVC=500
TC=1400*Given
MC=500*Given
AC=1400

If you want me to post everything I have gotten, I will.

I just went ahead and put my answers down.



This post was edited by Barcelona1011 on Oct 2 2013 05:24pm

Too lazy to check your table, but a profit-maximizing firm will produce until marginal cost is >= marginal revenue. This is because for any additional good, they will be losing more than they're making.

I know MC=MR is profit-maximization. That's why I'm confused. I never have a quantity where MC=MR

Well, assuming you've done the table right, this means that this happens at a non-integer quantity. From your table, it looks like somewhere between 3 and 4. If non-integer values don't need to be considered, then you stop producing at 3 because all quantities higher the MC is > MR, which is what I had already posted...


PS I'd check your table

This post was edited by zackill4 on Oct 2 2013 05:31pm

yes so you must find the lowest integer level where MR>MC, this gives Q = 3

Q ___ MR ___ MC ___ profit
2 ___ 600 ___ 400 ___ -400
3 ___ 400 ___ 300 ___ -300
4 ___ 200 ___ 500 ___ -600

PS. as far as i am concerned your table is correct

EDIT: Just to explain further the concept of MC=MR, MC=MR only applies when you have a continuous function for supply and demand. In a situation like this Q can only be an integer so you just need to find the point where MC exceeds MR.

This post was edited by canetoado on Oct 2 2013 11:48pm