The AAA Aquarium Co. sells aquariums for $20 each. Fixed costs of production are $20. The total...

Question

The AAA Aquarium Co. sells aquariums for $20 each. Fixed costs of production are $20. The total variable costs are $20 for one aquarium, $25 for two units, $35 for the three units, $50 for four units, and $80 for five units. In the form of a table, calculate total revenue, marginal revenue, total cost, and marginal cost for each output level (one to five units). What is the profit-maximizing quantity of output? On one diagram, sketch the total revenue and total cost curves. On another diagram, sketch the marginal revenue and marginal cost curves.

Robert · Accepted Answer

Units of   
Aquarium,q 
Fixed 
Costs, 
FC 
Total Variable 
Costs,TVC  
Total Costs, TC = FC + 
TVC 
Marginal Cost, MC 
= ∆ TC/∆q 
Price, P = 
MR,

The AAA Aquarium Co. sells aquariums for $20 each. Fixed costs of production are $20. The total variable costs are $20 for one aquarium, $25 for two units, $35 for the three units, $50 for four units,...

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