A. What is the profit-maximizing level of output and price?
b. What is the amount of total profit?
(Use the table below.)
Quantity (units) Price(dollars) Total revenue(dollars) Marginal revenue(dollars) Total cost Marginal cost(dollars)
1 22 6 6
2 20 14 8
3 18 26 12
4 16 44 18
5 14 72 28
6 12 112 40
7 10 166 54
8 8 236 70
Profit maximization:
When a firm, given the available resources, is able to generate an optimal level of profit, the action is referred to as profit maximization. The point of profit maximization for firms is the quantity that equalizes the marginal cost and marginal revenue.