Final answer:
To calculate total revenue, multiply the number of units sold by the price per unit. To calculate marginal revenue, subtract the total revenue of the previous output level from the total revenue of the current output level. The profit maximizing quantity can be determined by finding the output level where marginal cost equals marginal revenue.
Step-by-step explanation:
To calculate total revenue, multiply the number of units sold by the price per unit. For example, if the output level is 1 unit, the total revenue would be $72 (1 unit x $72). To calculate marginal revenue, subtract the total revenue of the previous output level from the total revenue of the current output level. For example, if the output level is 2 units, the marginal revenue would be $72 (total revenue of 2 units) - $72 (total revenue of 1 unit). To calculate total cost, sum up the fixed cost and variable cost. For example, if the output level is 1 unit, the total cost would be $100 (fixed cost) + $64 (variable cost of 1 unit). To calculate marginal cost, subtract the total cost of the previous output level from the total cost of the current output level. For example, if the output level is 2 units, the marginal cost would be $184 (total cost of 2 units) - $100 (total cost of 1 unit).
The profit maximizing quantity can be determined by finding the output level where marginal cost equals marginal revenue. In this case, it would be the output level where the marginal cost of each unit sold is equal to the marginal revenue of each unit sold. This occurs at the output level of 3, where the marginal cost is $114 and the marginal revenue is also $114.
The profit function can be calculated by subtracting the total cost from the total revenue. For each output level, the profit would be the total revenue minus the total cost. For example, if the output level is 1 unit, the profit would be $8 (total revenue of 1 unit) - $164 (total cost of 1 unit).