Profit Maximization And Demand Analysis The following data refer to the costs of a firm and the...

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Profit Maximization And Demand Analysis  The following data refer to the costs of a firm and the demand for its product.        Quantity sold      Price  £      Total cost  £         1      34      12         2      30      20         3      27      34         4      25      53         5      23      75         6      21      102         7      19      131      Requirements:  Using BOTH your knowledge of economic theory AND the data above,  (a) Calculate for each level of output the marginal cost the marginal revenue.   b) Calculate the level of profit at EACH level of output AND identify the profit-maximizing level of output.    (c)Calculate the price elasticity of demand for the good for a price fall from £25 to £23.   (d) Identify the factors which might explain the value of the elasticity of demand for       this good.               Explain how you would  expect the demand curve for this firm to vary if the number of firms in the  industry were to rise.                      Explain how you would  expect the demand curve for this firm to vary if the number of firms in the  industry were to rise.          
	
Document Preview: 24 Profit Maximization And Demand AnalysisThe following data refer to the costs of a firm and the demand for its product.Quantity soldPrice£Total cost£1341223020327344255352375621102719131Requirements:Using BOTH your knowledge of economic theory AND the data above,Calculate for each level of output the marginal cost the marginal revenue.	b) Calculate the level of profit at EACH level of output AND identify the profit-maximizing level of output.	(c)Calculate the price elasticity of demand for the good for a price fall from £25 to£23.	(d) Identify the factors which might explain the value of the elasticity of demand forthis good.Explain how you would expect the demand curve for this firm to vary if the number of firms in the industry were to rise.Explain how you would expect the demand curve for this firm to vary if the number of firms in the industry were to rise.

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Answer 
	Quantity 
sold
	Price 
£
	Total 
cost 
£
	Marginal 
cost 
£
	Total 
revenue 
£
	  1
	34
	12
	12
	34
	2
	30
	20
	8
	60
	3
	27
	34
	14
	81
	4
	25
	53
	19
	100
	5
	23
	75
	22
	115
	6
	21
	102
	27
	126
	7
	19
	131
	29
	133
· The marginal cost is the extent to which total costs change when output is changed by one unit.
· Marginal revenue is the change in revenue obtained when sales are changed by one unit.

Profit Maximization And Demand Analysis The following data refer to the costs of a firm and the demand for its product. Quantity sold Price £ Total cost £ 1 34 12 2 30 20 3 27 34 4 25 53 5 23 75 6 21...

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Quantity sold	Price £	Total cost £
1	34	12
2	30	20
3	27	34
4	25	53
5	23	75
6	21	102
7	19	131

this good.
Explain how you would expect the demand curve for this firm to vary if the number of firms in the industry were to rise.

Explain how you would expect the demand curve for this firm to vary if the number of firms in the industry were to rise.