1 point This is similar to a problem in the textbook A manuf

(1 point) This is similar to a problem in the textbook. A manufacturer of mountain bikes has the following marginal cost function: Cg) 700 0.7q +8 where q is the quantity of bicycles produced. When calculating the marginal revenue and marginal profit in this problem, use the approach given for the marginal cost and marginal revenue in the discussions in your textbook. a) If the fixed cost in producing the bicycles is $2200, find the total cost to produce 25 bicycles Answer: $ b) If the bikes are sold for $200 each, what is the profit (or loss) on the first 25 bikes? Answer: S c) What is the marginal profit on bike number 26? Answer: $

Solution

A. As given function below table shows the marginal cost for 25 Bikes which is $1129.79 and has fixed cost of $2200, so total cost will be $3329.79

B. If Bike is sold for $200 each, total revenue = 200*25=  $5000

So Profit will be $5000-$3329.79=$1670.21

C. Marginal cost for 26th Bike will be 26.72. SO total cost will be $3356.50 and Total revenue will be $5200. New profit will be $1843.50.

Marginal profit will be $1843.50-$1670.21= $173.29

No Of Bikes	Marginal cost
1	80.46
2	74.47
3	69.31
4	64.81
5	60.87
6	57.38
7	54.26
8	51.47
9	48.95
10	46.67
11	44.59
12	42.68
13	40.94
14	39.33
15	37.84
16	36.46
17	35.18
18	33.98
19	32.86
20	31.82
21	30.84
22	29.91
23	29.05
24	28.23
25	27.45
Total Marginal cost	1,129.79
Fixed Caost	2,200.00
Total Cost for 25 Bikes	3,329.79