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  3. a. the table 1 below provides data for the big cat

A. The Table 1 below provides data for the Big Cat Rescue Company. The price of...

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Question

Economics

  1. A. The Table 1 below provides data for the Big Cat RescueCompany. The price of entrance is $60 and Q refers to the number ofvisitors who can visit the Big Cat Reserve. Calculate TR= TotalRevenue, π=profit, MC= Marginal Cost and MR=Marginal revenue andfill in the blanks of the table.

B. Also, calculate TR, MR and π=profitwhen the entrance price falls to $50.

Table 1

Q

Price

TR when Price=60

TC

Profit

Ï€

MC

MR when Price=60

TR when P=$50

MR P=$50

Π

P=$50

0

60

100

1

60

150

2

60

178

3

60

198

4

60

212

5

60

230

6

60

250

7

60

272

8

60

310

9

60

355

10

60

410

C. As you look over the completedtable, what level of Q maximizes profit when price=$60 and whenprice=$50?

Answer & Explanation Solved by verified expert
4.5 Ratings (637 Votes)

Total Revenue = Price x Quantity

Marginal Revenue = Change in Total revenue / Change in Quantity

Marginal Cost = Change in Total Cost / Change in Quantity

Profit = Total Revenue - Total Cost

Q P TR MR TC MC Profit
0 60 0 -- 100 -- -100
1 60 60 60 150 50 -90
2 60 120 60 178 28 -58
3 60 180 60 198 20 -18
4 60 240 60 212 14 28
5 60 300 60 230 18 70
6 60 360 60 250 20 110
7 60 420 60 272 22 148
8 60 480 60 310 38 170
9 60 540 60 355 45 185
10 60 600 60 410 55 190

From the above table, the firm's achieves maximum profit at 10 units of 190

Q P TR MR TC MC Profit
0 50 0 -- 100 -- -100
1 50 50 50 150 50 -100
2 50 100 50 178 28 -78
3 50 150 50 198 20 -48
4 50 200 50 212 14 -12
5 50 250 50 230 18 20
6 50 300 50 250 20 50
7 50 350 50 272 22 78
8 50 400 50 310 38 90
9 50 450 50 355 45 95
10 50 500 50 410 55 90

From the above table, the firm's achieves maximum profit at 9 units of 95
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