profit assignment Question and
Answer
Using this table, calculate the marginal cost of each of these quantities of bikes. -
ANS80
20
50
60
This graph shows the marginal cost of producing each bike. Select the correct
answer from the options available.
Based on this graph, which bike has a marginal cost of $20? - ANSbike 4
Using this table, calculate the profit at each level of bicycle production. - ANS30
3
40
70
90
90
80
This graph shows the marginal costs of each bike, along with the market price.
Select the correct answer from the options available.
Based on this graph, at which level of production does the producer's profit stop
increasing? - ANSD
Sample response:Based on the data in the graphs, Alonzo's Cycling should
produce five or six bikes if it wants to maximize its profits. This is because the
sixth bike is the point at which the marginal revenue matches the marginal cost.
The company will make $90 in profit with the sale of its fifth or sixth bike each
day. After that, the profit begins to fall with each sale.
Which of these arguments did you include in your response? Check all that apply.
- ANSBased on the data in the graphs, Alonzo's Cycling should produce five or six
bikes if it wants to maximize its profits. This is because the sixth bike is the point
at which the marginal revenue matches the marginal cost. The company will
make $90 in profit with the sale of its fifth or sixth bike each day. After that, the
profit begins to fall with each sale.
ample response: If the market price of bikes rises from $50 to $60, then the
company will want to produce a larger quantity of bikes. This is because the
overall marginal revenue is now higher and will be maximized differently. Before
profit was maximized at six bikes, now the profit will be maximized by producing
more bikes, perhaps seven.
