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Marginal Revenue

The document provides cost and revenue data for the Ruby Ring Store including the price per ring sold, quantity sold at each price, and the company's fixed and variable costs. Students are asked to complete calculations for total cost, average variable cost, average cost, marginal cost, total revenue, marginal revenue, and profit at each quantity and price. They are also asked questions about optimal output level, profit at that level, and the type of competition.

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178 views2 pages

Marginal Revenue

The document provides cost and revenue data for the Ruby Ring Store including the price per ring sold, quantity sold at each price, and the company's fixed and variable costs. Students are asked to complete calculations for total cost, average variable cost, average cost, marginal cost, total revenue, marginal revenue, and profit at each quantity and price. They are also asked questions about optimal output level, profit at that level, and the type of competition.

Uploaded by

Dynafrom
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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I

Student Name: DljhfJr VT)V\A

Complete the following question in the spaces provided. The following are cost and revenue data for the Ruby Ring Store

If the company charges this price per ring It will sell this many rings per week

$ 5.00 0
4.50 150
4.00 300
3.50 450
3.00 600
2.50 750
2.00 900

The company's fixed costs are $300 per week and its variable costs are shown in the following table:

Q FC vc TC AVC AC MC TR MR Profit
0 300 0 300 Und uncK - o -300
150 366 850 U5Cs s~± 3L± ^-^ t35 Ho -^5
300 3>QD 1550 lt>50 5 -JL ^.2 q.i 1ZOG 3-5 - fcSO
450 loo 2050 ^3S6 iU S-Z 3-S \5T-S Z-5 -^5
600 IGQ 2500 2^00 M.Z 4^3s 3 a oo l-S - 1006
750 loo 3100 3Ho(N M-\ M- H \1^5 0-5 : IS 25
900 ICffl 4300 M6h6 !dbJ 5. \ L a<^ -0-5 -2Xo6

a) Complete the eight remaining columns in the table above.


b) Place the marginal cost and marginal revenue answers on the line between quantities.
c) Graph the AVC, AC, MC, AR, and the MR curves on the attached Graph Paper.
d) How much output will be produced?
e) What is the profit at this level?
f) What type of competition is this?

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