ECO 401 Assignment # 2 solution

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Part A Part B AC AR TR Profit/Loss 216.22 350 51800 19800 241.38 425 61625 26625 296.30 510 68850 28850 450 630 63000 18000 960 720 36000 -12000 2750 1000 20000 -35000 We know that AC= TC/Q TR= PxQ AR =TR/Q Now Profit/Loss= TR-TC

According to this approach, profit is maximized at that point where the difference between total revenue & total cost is maximum.

Now Profit is maximized at 28850 because difference between TR and TC is maximum