If the market price of each camera case is $8, what is the firm’s total revenue when the profit-maximizing quantity is found at the output where mr = mc?


  1. $3200
    The profit-maximizing quantity will take place where MR = MC—or at the last possible point before marginal costs start surpassing marginal revenue. The amount of goods produced at which marginal revenue equals marginal cost, or when MR = MC, is the decision that will maximize profits for the monopoly. If the monopoly produces less, MR > MC at given production levels, and the enterprise can increase profits by increasing output.
    While a company produces more, MC > MR prevails, allowing it to increase profits even when it produces less overall. Therefore:
    MC = change in total cost/change in quantity
          Change in quantity = 100 at each unit
          Change in total cost at 400 units = 2760 – 1960 = 800
          MC at 400 units  = 800/100 = 8
    Under perfect competition, profit maximizing condition is where;
          P = MC
          At 400 units, P = MC = 8
    Implies profit maximizing quantity is 400 units.
          Total revenue = Price x Quantity = 8 x 400 = $3200
    Here’s another question with an answer similar to this about total revenue:


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