# In the table below are given the output (X), T.C., and Price for a firm. Complete the following...

## Question:

In the table below are given the output (X), T.C., and Price for a firm. Complete the following table and then answer the questions at the bottom of the table.

X T.C P=A.R=52 T.R A.T.C M.C M.R Exact Profit (+)or (-) Loss
0 72 0 0 - - - -72
1 90 52 52 90 18 52 -38
2 112 52 104 56 22 52 -8
3 138 52 156 46 26 52 18
4 168 52 208 42 30 52 40
5 202 52 260 40.4 34 52 58
6 240 52 312 40 38 52 72
7 282 52 364 40.29 42 52 82
8 328 52 416 41 46 52 88
9 378 52 468 42 50 52 90
10 432 52 520 43.2 54 52 88

a. The profit maximization level of output (PMS) for a price of $52 is _____ units of output with a (proft/loss) _____ of$ _____.

b. At various prices below, indicate the Quantity Supplied and its corresponding Profit or Loss (exact amount)

Price Quanitty Supplied Profit or Loss
54
46
42
38
34
26
16

## What is the profit maximization rule?

The profit maximization rule states that firms should always produce at the level where Marginal Revenue (MR) equals Marginal Cost (MC). That level will maximize profit because the next to last unit has a higher MR than MC, so not producing it leaves money on the table. Producing beyond the level where MR=MC means that the cost exceeds the revenue, which doesn't make sense for a profit-maximizing firm.

a. The profit maximization level of output (PMS) for a price of $52 is 9 units of output with a profit of$90.