Tuesday, November 25, 2014

What is the quantity that will maximize profit? and what will the profit be?

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3 comments:

  1. Noura BinkhathlanNovember 26, 2014 at 12:25 AM

    the quantity that will maximise profit is 8 ( because to maximise profit MR must =MC)
    and the profit will be:
    8x70= 560$

    Noura

    ReplyDelete
  2. Gale L. PooleyNovember 27, 2014 at 11:33 AM

    Noura,

    The quantity is correct.
    Are you sure about the profit?
    Don't confuse total revenue with profits.

    ReplyDelete
  3. Noura BinkhathlanNovember 27, 2014 at 12:51 PM

    The quantity that will maximise profit is 8 ( because to maximise profit MR must =MC)

    and the profit will be:
    1) We have to know the total cost ( Average Cost x Quantity)
    =50 x 8
    = 400$
    2) We have to know the total revenue ( Price x Quantity )
    = 70 x 8
    = 560$
    3) finding the profit (total revenue - total cost)
    = 560 - 400
    = 160 $

    ReplyDelete

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