Economics problem

P     Q          TC      ATC     MC    TR   MR

0      250      500

1      240       730

2      230       870

3      220       950

4      210       1010

5      200       1090

6      190       1230  

7      180       1470

8      170       1850

9       160       2410

 

calculate maximum profit  or minimum loss

a)  Loss 100 Rs

b)  Loss 60 Rs

c)  profit 90 Rs

d) loss 90 Rs

my confusion is which represents loss TR or MR or AR ??  and how to solve ??

Replies (9)

P      Q          TC       ATC     MC       TR            MR

0      250      500      2         -             0               -

1       240      730      3        -23         240      -   24

2      230       870      4         -14         460        - 22

3       220       950      4        -8            660       -   20

4       210       1010     5       -6            840        -   18

5       200        1090    5        -8            1000     -    16

6       190       1230    6        -14            1140        - 14

7       180        1470    8          -24          1260      -   12

8        170        1850    11      -38          1360         -  10

9        160         2410   15      -56           1440          - 80

                                             -----------                       ------------

                                             -191                                 -216

ATC = TC/Q

MC = HANGE TC/CHANGE TQ

TR = P*Q

MR = CHANGE TR/ CHANGE Q

i know formulas i want to know how can we say it is loss or profit

you sure the question is right???? usually as quantity decreases total cost should decrease but here it is the opposite. where did you get the question?

 

igot it frm selfassesment quiz

negative marginal return means firm will continue its profit maximum.

however to calculate profit or loss it is just Total Revenue - total Cost so

P       Q     TC        TR            Loss

0     250    500        0                500

1     240    730       240             490  (730-240)

2     230    870       460             410   (870-460)

3     220    950       660             290    (950 - 660)

4     210    1010     840             170     (1010 - 840)

5     200    1090     1000             90      (1090 - 1000)

6     190    1230     1140             90       (1230 - 1140)

7      180    1470    1260            210     (1470-1260)

8      170    1850    1360            490      (1850 - 1360)

9       160   2410    1440            970      (2410 - 1440)

90 is the minimum loss so answer is d but the question itself is nonsensical

If it costs 500 for a firm to produce 250 items it will not cost 730 for the firm to produce 240 items(he is paying to reduce the number of items!!!!!!!!!!!)

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