Question

Complete Table 1 by computing the Total Revenue, Marginal Revenue, Total Cost, and Profit columns, each rounded to two decimal places. The cost of duplicating a video on a DVD and mailing the DVD, the Marginal Cost, is $5.56. (1 point)

Table 1

Suggested Donation per DVD Request	Anticipated Number of DVD Requests	Total Revenue	Marginal Revenue	Total Cost	Profit
$19.00	0
$15.00	2
$9.50	5
$7.75	9
$3.00	15
$0.00	24

b. The President wants the GSTCG to provide videos to generate the most possible donations (Total Revenue). What price is the President of the GSTCG favoring and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers. (1 point)

c. The Education Outreach Committee wants the GSTCG to provide videos to the most possible number of people. What price is the Educational Outreach Committee favoring and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers. (1 point)

d. The Treasurer of the GSTCG wants the DVD program to be as efficient as possible so that the marginal revenue equals marginal cost. What price is the Treasurer favoring and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers. (1 point)

e. The Fundraising Committee wants the DVD program to generate as much profit in donations as possible. What price is the Fundraising Committee favoring and how many people will receive the DVD if this becomes the price of the suggested donation? Explain your answers. (1 point)

Answer 1

a.

Donation	DVDs	TR	MR	TC	MC	profit
19	0	0	-	0	-	0
15	2	30	15	11.12	5.56	18.88
9.5	5	47.5	5.83	27.8	5.56	19.7
7.75	9	69.75	5.56	50.04	5.56	19.71
3	15	45	-4.125	83.4	5.56	-38.4
0	24	0	-5	133.44	5.56	-133.4

b. The President of the GSTCG will favor $7.75 (maximum revenue). 9 people will receive DVDs. Assuming 1 DVD goes to each person, the anticipated DVD requests are 9. With $7.75, the donations will amount to $69.75.

c. The Education Outreach Committee wants the GSTCG to provide videos to the most possible number of people. So it will favor a price of $3. DVDs will reach 15 people. It will incur a loss of $38.4.

d. The Treasurer of the GSTCG wants the DVD program to be as efficient as possible so that the marginal revenue equals marginal cost. So he will favor a price of $7.75, where 9 people will receive DVDs. At this price, (MC=MR=$5.56)

e. The Fundraising Committee wants the DVD program to generate as much profit in donations as possible, so it will suggest a price of $7.75, where profit is highest and equal to $19.71. In this case, 9 people will receive DVDs.Out of the various levels, the highest profit is $19.71 when $7.75 donation is receivd from 9 people.