Use the table to answer the following questions: Quantity of yams(kg) Total Revenue (TR) Marginal Revenue (MR) Total Cost (TC) Marginal Cost (MC) N N N N 0 ...
Question 1 Report
Use the table to answer the following questions:
| Quantity of yams(kg) | Total Revenue (TR) | Marginal Revenue (MR) | Total Cost (TC) | Marginal Cost (MC) |
| N | N | N | N | |
| 0 | 0 | - | 5 | - |
| 1 | 9 | 9 | 8 | 3 |
| 2 | 18 | 9 | 6 | T |
| 3 | 24 | 6 | 21 | 5 |
| 4 | 28 | Q | 25 | 4 |
| 5 | 30 | 2 | 25 | U |
| 6 | P | 1 | 25 | 0 |
| 7 | 28 | -3 | S | 1 |
| 8 | 24 | R | 24 | -2 |
(a) Complete the table by calculating the missing figures P,Q,R,S,T,U.
(b)At what out-put is profit maximized?
(c) Calculate the profit when quantity sold is 5.
(d) At what output does MC begin to rise?
Answer Details
(a) Completed table
| Quantity of yams (kg) | Total Revenue, TR (₦) | Marginal Revenue, MR (₦) | Total Cost, TC (₦) | Marginal Cost, MC (₦) | Profit, TR − TC (₦) |
|---|---|---|---|---|---|
| 0 | 0 | – | 5 | – | −5 |
| 1 | 9 | 9 | 8 | 3 | 1 |
| 2 | 18 | 9 | 16 | 8 | 2 |
| 3 | 24 | 6 | 21 | 5 | 3 |
| 4 | 28 | 4 | 25 | 4 | 3 |
| 5 | 30 | 2 | 25 | 0 | 5 |
| 6 | 31 | 1 | 25 | 0 | 6 |
| 7 | 28 | −3 | 26 | 1 | 2 |
| 8 | 24 | −4 | 24 | −2 | 0 |
Thus, P = ₦31, Q = ₦4, R = −₦4, S = ₦26, T = ₦8 and U = ₦0.
Working:
\(P = 30 + 1 = \text{₦}31\)
\(Q = 28 - 24 = \text{₦}4\)
\(R = 24 - 28 = -\text{₦}4\)
\(S = 25 + 1 = \text{₦}26\)
\(T = 16 - 8 = \text{₦}8\)
\(U = 25 - 25 = \text{₦}0\)
(b) Profit is maximized at an output of 6 kg of yams, where profit is \(\text{₦}31 - \text{₦}25 = \text{₦}6\).
(c) At 5 kg output:
\[\text{Profit} = TR - TC = \text{₦}30 - \text{₦}25 = \text{₦}5.\]
(d) MC begins to rise at an output of 7 kg, increasing from ₦0 at 6 kg to ₦1 at 7 kg.
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