$\text {Demand and Cost Data for Will's Beach Ball Company}$

$\begin{array}{l}
\begin{array}{cccc}
&\text { Demand Data}& \text { Cost Data }\
\text { Price } & \text { Quantity } & \text { Output } & \text { Total Cost } \
\$ 11 & 6 & 6 & \$ 48 \
\$ 10 & 7 & 7 & \$ 52 \
\$ 9 & 8 & 8 & \$ 57 \
\$ 8 & 9 & 9 & \$ 63 \
\$ 7 & 10 & 10 & \$ 70
\end{array}
\end{array}$

$\text {Table $26.1$}$
$\text {A Monopolistically Competitive Firm}$ Refer to Table 26.1.At the profit-maximizing output and price, Will's Beach Ball Company will earn a profit equal to

Question

$\text {Demand and Cost Data for Will's Beach Ball Company}$

$\begin{array}{l}
\begin{array}{cccc}
&\text { Demand Data}& \text { Cost Data }\
\text { Price } & \text { Quantity } & \text { Output } & \text { Total Cost } \
\$ 11 & 6 & 6 & \$ 48 \
\$ 10 & 7 & 7 & \$ 52 \
\$ 9 & 8 & 8 & \$ 57 \
\$ 8 & 9 & 9 & \$ 63 \
\$ 7 & 10 & 10 & \$ 70
\end{array}
\end{array}$

$\text {Table $26.1$}$
$\text {A Monopolistically Competitive Firm}$  Refer to Table 26.1.At the profit-maximizing output and price, Will's Beach Ball Company will earn a profit equal to

Quizplus · Accepted Answer

To find the profit-maximizing output and price, we need to look for the output level where marginal revenue (MR) equals marginal cost (MC). Since the table doesn't directly provide MR or MC, we can infer them from the given data. The change in total revenue (TR) as output increases gives us MR, and the change in total cost (TC) as output increases gives us MC.From the table, we can calculate the total revenue (Price * Quantity) for each output level and then find the change in total revenue and total cost between each level to identify where MR = MC.- At a price of $11 and quantity of 6, TR = $11 * 6 = $66.- At a price of $10 and quantity of 7, TR = $10 * 7 = $70.- At a price of $9 and quantity of 8, TR = $9 * 8 = $72.- At a price of $8 and quantity of 9, TR = $8 * 9 = $72.- At a price of $7 and quantity of 10, TR = $7 * 10 = $70.The change in TR from selling 7 instead of 6 units is $4 (from $66 to $70), and the change in TC is $4 (from $48 to $52), indicating MR = MC at this output level. Therefore, the profit-maximizing output is 7 units at a price of $10 each.Profit is calculated as total revenue minus total cost. At 7 units, TR = $70 and TC = $52, so profit = $70 - $52 = $18.

Demand and Cost Data for Will’s Beach Ball Company\text {Demand and Cost Data for Will's Beach Ball Company}Demand and Cost Data for Will’s Beach Ball Company

$\text {Demand and Cost Data for Will's Beach Ball Company}$