1. Use the following to calculate profit at each quantity of output.
(Total) Output (Q) Price (P) Total Revenue (TR) Total Cost (TC)
0 $1,900 $ 0 $1,000
1 $1,700 $ 1,700 $2,000
2 $1,650 $ 3,300 $2,800
3 $1,600 $ 4,800 $3,500
4 $1,550 $ 6,200 $4,000
5 $1,500 $ 7,500 $4,500
6 $1,450 $ 8,700 $5,200
7 $1,400 $ 9,800 $6,000
8 $1,350 $10,800 $7,000
9 $1,300 $11,700 $9,000
2. Use the table to calculate marginal revenue and marginal cost.
3. Use the information in exercises 1 and 2 to graphically show maximum profit. Label the profit maximizing quantity and price, total cost, total revenue, and profit.
4. Can accounting profit be positive and economic profit negative? Can accounting profit be negative and economic profit positive? Explain.