MGEA06H3 Final: Ch10&11-A-Working-Model(Economist)
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2. Does this fourth shirt earn an operating profit or impose an operating loss? How large is it?
3. What is the change in total revenue from lowering the price to sell seven rather than six shirts in each color each day? In what sense is the decision to sell this seventh shirt a âbreak pointâ?
8. At 14 shirts per day, the margin is positive. But what is the operating profit or loss on the 14th? The 12th? The 10th shirt?
| Quantity | Price | Revenue | Marginal Rev | Variable Cost |
| 0 | 50 | 0 | 0 | 28 |
| 1 | 48 | 48 | 48 | 28 |
| 2 | 46 | 92 | 44 | 28 |
| 3 | 45 | 135 | 43 | 28 |
| 4 | 44 | 176 | 41 | 28 |
| 5 | 42 | 210 | 34 | 28 |
| 6 | 40 | 240 | 30 | 28 |
| 7 | 38.31 | 268.17 | 28 | 28 |
| 8 | 36.5 | 292 | 24 | 28 |
| 9 | 34.5 | 310.5 | 19 | 28 |
| 10 | 32.7 | 327 | 16 | 28 |
| 11 | 30.91 | 340.01 | 13 | 28 |
| 12 | 29.17 | 350.04 | 10 | 28 |
| 13 | 27.46 | 356.98 | 7 | 28 |
| 14 | 25.79 | 361.06 | 4 | 28 |
| 15 | 24.07 | 361.05 | 0 | 28 |
| 16 | 22.5 | 360 | -1 | 28 |
Suppose that the marginal product tripled while product price fell by one-half in the table below.
| Units of Resource | Total Product (Output) | Marginal Product (MP) | Product Price (in $) | Total Revenue | Marginal Revenue Product (MRP) in $ |
| 0 | 0 | 0 | 2 | 0 | 0 |
| 1 | 7 | 7 | 2 | 14 | 14 |
| 2 | 13 | 6 | 2 | 26 | 12 |
| 3 | 18 | 5 | 2 | 36 | 10 |
| 4 | 22 | 4 | 2 | 44 | 8 |
| 5 | 25 | 3 | 2 | 50 | 6 |
| 6 | 27 | 2 | 2 | 54 | 4 |
| 7 | 28 | 1 | 2 | 56 | 2 |
What would be the new values in the table?
