A what is the rate of output maximizes total revenue B what

Refer to the igures of a monopolistic catfish farmer below Average total cost Demand Demand Marginal revenu Marpinal revenue Marginal cost Quantity (bushels of fish per day) Quantity (bushels of fish per day)

Solution

A) TR is maximum when P=MR=MC. when quantity is 7 bushels and price is 7 units, TR=7*7=$49 bushels of fish per day is maximum revenue.

B) Profit is maximized when output is produced at MR=MC. when quantity is 4 bushels profit is maximized.

C) At 4 bushels MR is $7

D) The price at profit-maximizing the output of 7 bushels is $10