Egt 1

A.

Total revenue can be defined as price multiplied by quantity of a unit. Total cost is the total of expenses that are related to production. To find the profit from the selling of the units, we simply subtract the total revenue from the total cost. As this relates to profit maximization, we must find the maximum difference between the total revenue and total cost to show that our gain is at its maximum profit. Marginal simply means change or additional. Marginal cost can be defined as the change in total cost due to a change in quantity. Marginal Cost is the cost includes all extra costs required to produce additional units. Marginal revenue is the change in total revenue due to a change in quantity. Marginal revenue increases as the productivity of units are low but decreases as the quantity increases. Therefore, it is better to produce in the early stages of production when fewer units are required because the more units available a decrease in marginal revenue begins. To find profit maximization between marginal revenue and marginal cost, we would have to find where they both are equal to one another.

B.

Marginal revenue=change total revenue/change in quantity

Marginal revenue is the change of total revenue resulting from a change in quantity. Marginal revenue decreases in the scenario as the quantity sold increases. In the scenario, we see that marginal revenue decreased by ten as more units were produced. This could simply mean the company is being dominated by a monopolistic competitive market.

C.

Marginal cost=change in total cost/change in quantity

Marginal cost is the change in total cost from results of units produced. Marginal costs increase as the units produced. In the scenario the more units produced, marginal costs increased by ten. This type of change is actually causing the company to use more money in producing instead of earning.

D.

Profit maximization is a process that companies go through to determine the best production and price...