The total fixed cost is $60 per month. (a) If the price pervisit is $60,...

The total fixed cost is $60 per month. (a) If the price per visit is $60, at what level of visits will the maximum profit position be? (b) What are the profits at this level?(c) What is the quantity supplied? (d) If the total fixed cost increases to $80 and the price per visit is $60, what is the quantity supplied (assuming maximizing profits)?

quantity per visits supplied:1,2,3,4,5,6,

total variable cost: 20,50,90,140,210,290

Solutions

Expert Solution

Answer.

Quantity	TR	MR	TVC	TFC	MC	TC	PROFIT =TR-TC	TC for TFC=80	Profits*
1	60	-	20	60	-	80	-20	100	-40
2	120	60	50	60	30	110	10	130	-10
3	180	60	90	60	40	150	30	170	10
4	240	60	140	60	50	200	40	220	20
5	300	60	210	60	70	270	30	290	10
6	360	60	290	60	80	350	10	370	-10

* Profit is maximum at 4 units per visit supplied and $40 is the profit. And, for TFC $80 profit is maximum at 4 units only.

Rahul Sunny answered 1 year ago

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