Question

Total revenue for producing 10 units of output is $5. Total revenue for producing 11 units of output is $9. Given this information, the

1. Average revenue for producing 11 units is $2.

2. Average revenue for producing 11 units is $4

3. Marginal revenue for producing the 11th unit is $2.

4. Marginal revenue for producing the 11th unit is $4.

Output	Total Cost
0	40
1	80
2	110
3	130
4	160
5	200
6	250
7	320

Refer to the above data. If product price is $30, the firm will: 
A. shut down.
B. produce 4 units and realize a $40 economic profit.
C. produce 6 units and realize a $70 loss.
D. produce 5 units and incur a $60 loss.

Answer 1

Answer
MR(n)=TR(n)-TR(n-1)
MR(n)= MR of n th unit of output
TR(n)=TR of n units of output

MR(11)=9-5=4

Option 4
===
AR=TR/Q
AR(11)=9/11
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Ahnswer
The firm produces at MC=P to maximize profit if P>AVC otherwise shutdown
MC(n)=TC(n)-TC(n-1)

MC=marginal cost of n th unit

TC(n)=total cost of n unit
MC(1)=80-40=40
MC(2)=110-80=30
MC(3)=130-110=20
MC(4)=160-130=30 and so on
MC=P at Q=4 units when MC is increasing
VC=TC-FC
FC=the cost is same at all level and it is equal to total cost at Q=0
FC=40
VC=160-40=120
AVC=VC/Q
AVC=120/4=30
P=AVC so the firm shutdown and make a loss equal to the fixed cost
Option A
Shutdown