Complete the following table and determine the point of profit maximization.
?
Quantity
TotalRevenue
MarginalRevenue
TotalCost
MarginalCost
Profit
100
500
_____
200
_____
_____
101
504.95
_____
204.50
_____
_____
102
509.85
_____
209.10
_____
_____
103
514.70
_____
213.80
_____
_____
104
519.50
_____
218.60
_____
_____
105
524.25
_____
223.50
_____
_____
106
528.95
_____
228.50
_____
_____
107
533.60
_____
233.60
_____
_____
108
538.20
_____
238.80
_____
_____
109
542.75
_____
244.10
_____
_____
110
547.25
_____
249.50
_____
_____
What will be an ideal response?
| ?Quantity | Total Revenue | Marginal Revenue | Total Cost | Marginal Cost | Profit |
| 100 | 500 | ? | 200 | ? | 300 |
| 101 | 504.95 | 4.95 | 204.50 | 4.50 | 300.45 |
| 102 | 509.85 | 4.90 | 209.10 | 4.60 | 300.75 |
| 103 | 514.70 | 4.85 | 213.80 | 4.70 | 300.90 |
| 104 | 519.50 | 4.80 | 218.60 | 4.80 | 300.90 |
| 105 | 524.25 | 4.75 | 223.50 | 4.90 | 300.75 |
| 106 | 528.95 | 4.70 | 228.50 | 5.00 | 300.45 |
| 107 | 533.60 | 4.65 | 233.60 | 5.10 | 300 |
| 108 | 538.20 | 4.60 | 238.80 | 5.20 | 299.40 |
| 109 | 542.75 | 4.55 | 244.10 | 5.30 | 298.65 |
| 110 | 547.25 | 4.50 | 249.50 | 5.40 | 297.75 |
Management must have assumed that the decrease in cost from cutting back on styles would be greater than the decrease in revenue from lost sales. If so, the move would increase profits and would be a rational decision.
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