Problem
Look carefully at the diagram (Figure 4.6).
(a) At what output is total profit a maximum? What is the value of total profit at this output?
(b) At what output is total revenue a maximum? What is the value of total revenue at this output?
(c) What is the situation at both output Q1 and Q4?
(d) If the firm is seeking to maximise sales revenue subject to the minimum profit constraint (1), what output should it produce? Would anything change if the minimum profit constraint rises from (1) to (2)?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.