Looking at the Table, Profit, Cost and Revenue Functions, Quant is the quantity of output, C(Q) is the Total Cost of production for corresponding quantities of output, R(Q) is the corresponding Total Revenue at each level of output Q, if all output is sold and PRF(Q) is the Total Profit for each corresponding output level. PRF(Q) is calculated as R(Q)-C(Q) Using this information, does the company make its highest profit where R(Q) is highest? Oa. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 15 b. Yes, because there is no way that cost can exceed revenue when revenue is maximized. c. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 10 or 12 or in between. Od. Yes, because the highest possible revenue will provide the most margin against cost. For this problem, the output level that yields the highest profit is 12

Looking at the Table, Profit, Cost and Revenue Functions, Quant is the quantity of output, C(Q) is the Total Cost of production for corresponding quantities of output, R(Q) is the corresponding Total Revenue at each level of output Q, if all output is sold and PRF(Q) is the Total Profit for each corresponding output level. PRF(Q) is calculated as R(Q)-C(Q) Using this information, does the company make its highest profit where R(Q) is highest? Oa. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 15 b. Yes, because there is no way that cost can exceed revenue when revenue is maximized. c. No, because the highest possible revenue may be at an output level where the cost of output may exceed the revenue generated at that output level. In this problem, the highest profit is at output level 10 or 12 or in between. Od. Yes, because the highest possible revenue will provide the most margin against cost. For this problem, the output level that yields the highest profit is 12

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter11: Price-searcher Markets With High Entry Barriers

Section: Chapter Questions

Problem 14CQ

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