Table 10.4 Table 10.4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories.
-Refer to Table 10.4.Victoria's profit-maximising quantity sold (Q)and price (P)are
A)Q = 3; P = $7.
B)Q = 4; P = $6.
C)Q = 5; P = $5.
D)Q = 6; P = $4.

Question

Table 10.4  Table 10.4 lists estimated revenues and costs (per week)for plastic vials (100 vials per box)for the Victoria Biological Supplies Company.Victoria sells plastic vials to university and private research laboratories.
-Refer to Table 10.4.Victoria's profit-maximising quantity sold (Q)and price (P)are
A)Q = 3; P = $7. 
B)Q = 4; P = $6. 
C)Q = 5; P = $5. 
D)Q = 6; P = $4.

Quizplus · Accepted Answer

To determine the profit-maximising quantity sold and price, we need to find the point where marginal revenue equals marginal cost. We can calculate marginal revenue by finding the change in total revenue from producing one more unit. We can calculate marginal cost by finding the change in total cost from producing one more unit.

Using the data in the table, we can calculate the marginal revenue and marginal cost for each level of output:

| Q | TR | MR | TC | MC |
| - | -- | -- | -- | -- |
| 1 | 20 |   | 15 |    |
| 2 | 40 | 20 | 28 |  13 |
| 3 | 54 | 14 | 38 |  10 |
| 4 | 64 | 10 | 48 |  10 |
| 5 | 70 |  6 | 63 |  15 |
| 6 | 72 |  2 | 78 |  15 |

From this table, we can see that the profit-maximising quantity sold is 4, where marginal revenue equals marginal cost ($10 per vial). At this quantity, the price is $6 per vial (from the total revenue column). Therefore, the best choice is B.

Table 104 Table 10