Question - The table below shows the total cost (TC) and marginal cost (MC) for Baker Street, a perfectly competitive firm producing different quantities of apple pies. The market price of apple pies is $4.00 per pie.
a. Fill in the marginal revenue (MR) and average revenue (AR) columns.
|
Baker Street's Costs and Revenues
|
|
Quantity
(apple pies)
|
TC
(dollars)
|
MC
(dollars)
|
MR
(dollars)
|
AR
(dollars)
|
|
5
|
55.00
|
$1.00
|
$
|
$
|
|
10
|
57.50
|
0.50
|
|
|
|
15
|
62.50
|
1.00
|
|
|
|
20
|
72.50
|
2.00
|
|
|
|
25
|
92.50
|
4.00
|
|
|
|
30
|
122.50
|
6.00
|
|
|
b. At the market price of $4.00 per apple pie, how many apple pies should Baker Street make?
b. If the market price for apple pies were to rise to $6.00 per apple pie, how many apple pies should Baker Street make?