Question

The owner of ProPhone has charted the company's marginal revenue and marginal cost for its latest line of smartphones, the Blazer. Use the chart to calculate the company's profit. What is the difference between marginal cost and marginal revenue at the point when profits are maximized on the chart

Answer 1

The answer is 10

Step-by-step explanation:

Answer 2

$10

Step-by-step explanation:

Quantity Total revenue - total cost Profit / loss

0 0 - 90 (90)

1 200 - 170 30

2 360 - 200 160

3 480 - 290 190

4 600 - 340 260

5 700 - 400 300

6 810 - 500 310

7 910 - 620 290

Since the profits are maximized when 6 units are sold, the marginal revenue for the 6th unit = selling price 6th unit - selling price 5th unit = $810 - $700 = $110

The marginal cost for the 6th unit = cost 6th unit - cost 5th unit = $500 - $400 = $100

The difference between marginal revenue and marginal cost for the 6th unit = $110 - $100 = $10