Question

Write three to five sentences explaining which levels of production provide Alonzo’s Cycling with the maximum profit.

Answer: 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.

Answer 1

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.

Explanation:

On edge.

Answer 2

Please read the answer below.

Explanation:

With the first unit produced, profitability is negative in Alonzo’s Cycling store. From the second bicycle, it becomes positive and with the fifth and sixth unit reaches its maximum, US $ 90. With the seventh unit, profitability falls to US $ 80. This is due to the effect of marginal cost on marginal profit.