Firm's Output Decision Based on Marginal Profit

A company that produces widgets is currently making 100 widgets per day. At this level of production, its total daily revenue is $5,000 and its total daily cost is $3,500. If the company decides to produce 101 widgets tomorrow, its total daily revenue would be $5,045 and its total daily cost would be $3,530. Based on this information, what is the specific change in the company's total profit that would result from producing the 101st widget?

Production Decision Analysis

Profit Analysis for a Small Bakery

A firm is considering increasing its production by one unit. If the additional revenue generated from selling this unit is exactly equal to the additional cost of producing it, the firm's total profit will increase.

Analyzing Components of Marginal Profit

A firm is analyzing the effect of producing and selling one more unit of its product. Match each potential scenario with its direct impact on the firm's total profit.

Evaluating a Profit Strategy

When the revenue gained from selling one additional unit of a product is $50 and the cost to produce that same unit is $35, the change in total profit from producing and selling that unit, also known as the __________, is $15.

A firm is currently producing 1,000 units of a product and is operating at a total economic loss. At this level of output, the revenue gained from selling one additional unit is $50, while the cost incurred to produce that one additional unit is $40. Based on this information, what is the most logical step for the firm to take to move towards its profit-maximizing level of output?

A firm is analyzing its production levels to maximize profit. The table below shows the marginal revenue (MR) and marginal cost (MC) for each additional unit of its product.

Based on this data, what is the profit-maximizing quantity of output for the firm?