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ECON 213 Principles of
Economics Pearl owns a
company that produces Super
Toys Answer
ECON 213 Principles of Economics Pearl owns a company that produces Super Toys
Answer
ECON 213 PRINCIPLES OF MICROECONOMICS
WINTER 2010
Labor Output Total Cost Marginal Average Total Revenue
(TC) Cost (MC) Cost P=125
0 0 $3,000.00 $
1 10 $4,250.00 $125.00 $425.00 $1,250.00
2 25 $5,500.00 $83.33 $220.00 $3,125.00
3 45 $6,750.00 $62.50 $150.00 $5,625.00
4 70 $8,000.00 $50.00 $114.29 $8,750.00
5 95 $9,250.00 $50.00 $97.37 $11,875.00
6 115 $10,500.00 $62.50 $91.30 $14,375.00
7 133 $11,750.00 $69.44 $88.35 $16,625.00
8 149 $13,000.00 $78.13 $87.25 $18,625.00
9 164 $14,250.00 $83.33 $86.89 $20,500.00
10 174 $15,500.00 $125.00 $89.08 $21,750.00
11 182 $16,750.00 $156.25 $92.03 $22,750.00
12 188 $18,000.00 $208.33 $95.74 $23,500.00
13 192 $19,250.00 $312.50 $100.26 $24,000.00
Pearl owns a company that produces Super Toys. The table above shows that
Pearls Fixed Cost is $3000.00. Pearl pays $1,250 for each unit of labor. Marginal
and Average Costs of production are show n in the table. If Pearl conducts
business in a Perfectly Competitive Market where the price of each toy sold is
$125.00:
What is Pearls Marginal Revenue for each additional unit of Super Toy sold?
What is the Profit Maximizing number of Toys that Pearl should produce?