You are an economic consultant and encounter a firm with the following data:
|
Quantity of Labor
|
Fixed Costs
|
Variable Costs
|
Total Costs
|
Quantity
|
Marginal Costs
|
|
5
|
$150
|
|
|
20
|
|
|
6
|
$150
|
|
|
28
|
|
|
7
|
$150
|
|
|
34
|
|
|
8
|
$150
|
|
|
38
|
|
The wage rate is $8 per unit. Fill in the rest of the table.
The price-quantity combination is as follows:
Fill in the rest of the table
|
Price
|
Quantity
|
TR
|
MR
|
|
$10.50
|
20
|
|
|
|
$9.24
|
28
|
|
|
|
$7.87
|
34
|
|
|
|
$6.33
|
38
|
|
|
What is the profit-maximizing price and quantity and what is the profit at that point?