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Quantity 0 1 2 3 4 5 6 7 8 Price (in whole dollars) 42 41 40 39 38 37 36 35 34 Marginal Cost Analysis Data Total Marginal Total Cost Revenue Revenue
For this assessment you will produce a marginal cost analysis graph and create a scenario that explains where the firm should set price and quantity levels.
Step One: Refer to the following data table.
Marginal Cost Analysis Data
Step Two: Determine a product market (a specific good or service) appropriate to the prices listed. Make this the title of your graph and data table.
Step Three: Calculate the marginal revenue, marginal cost, and profit for each quantity level. Fill in the data table.
Step Four: Create a graph of the data. Quantity is along the x-axis and price is along the y-axis. Graph the marginal revenue curve and the marginal cost curve.
Step Five: Answer the following questions. You will submit your responses with your data table and graph to your instructor.
- What product market did you choose for this data to represent? Explain why.
- Where does marginal cost nearly equal marginal revenue without exceeding it? Highlight this point on your graph.
- If you were in business for this product, at which price and quantity level would you sell? Explain why.