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find out the marginal cost, marginal revenue, average cost, average revenue, average variable cost, profit.

 

A manufacturer of electronics products has just developed a handheld computer. The subsiquent is the price schedule for producing these computers on a monthly basis. Also included is a schedule of prices and quantities that the firm believes it will be able to sell, based on previous market research.

 

Q (thousand)

Price

MR

AVC

AC

MC

0

$1,650

 

 

 

 

1

1,570

$1,570

$1,281

$2,281

$1,281

2

1,490

1,410

1,134

1,634

987

3

1,410

1,250

1,009

1,342

759

4

1,330

1,090

906

1,156

597

5

1,250

930

825

1,025

501

6

1,170

770

766

933

471

7

1,090

610

729

872

507

8

1,010

450

714

839

609

9

930

290

721

832

777

10

850

130

750

850

1,011

  1. What price should the firm charge if it wants to maximize its profits in the short run?
  2. What arguments can be made for charging a price higher than this price? If a higher price is established, what amount would you recommend?  describe.

What arguments can be made for charging a lower price than the profit maximizing level? If a lower price is established, what amount would you recommend?  describe.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M918392

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