Final answer:
To find the profit-maximizing output, we calculate where marginal revenue equals marginal cost, typically using the total cost and demand equations. The maximum profit, as per the example data, occurs at an output level of 80 units where MR = MC.
Step-by-step explanation:
To determine the profit-maximizing output q and the corresponding maximum profit for the manufacturer, we would need to calculate and compare the total revenue and total cost at different levels of output and find the point where profit (total revenue minus total cost) is maximized. To do this, we look at the point where marginal revenue (MR) is equal to marginal cost (MC). The production should expand as long as MR > MC because this will increase economic profits. Once MR = MC, expanding production further would reduce economic profits. Using the information provided in Table 8.1, it suggests that the maximum profit occurs between an output level of 70 and 80 units. However, the production should be stopped at 80 units, where MR equals MC. This because although the profit is the same at 70 and 80 units, beyond 80 units the profits fall, indicating that is where the profit is maximized. To calculate these values, we would typically derive the marginal cost and marginal revenue from the total cost and demand equations provided, set MR = MC, and solve for q.