Andrea's Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The demandcurve for the treatments is given by the first two columns in the following table; its total costs are given in the third column. Answer the followingquestion accordingly .Price QuantityTC$25.00$100$24.00 10$250$23.00 20$420$22.00 30$600$21.00 40$780$20.00 50$970$19.00 60$1,170In order to maximize profit, the above firm should produce where:Select one:a. Marginal Revenue = Marginal Costb. Price= Average Total CostC. Price = Marginal Costd. Economic profit= zero

Answered: In order to maximize profit, the above…

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In order to maximize profit, the above firm should produce where:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Andrea's Day Spa began to offer a relaxing aromatherapy treatment. The firm asks you how much to charge to maximize profits. The demand
curve for the treatments is given by the first two columns in the following table; its total costs are given in the third column. Answer the following
question accordingly .
Price QuantityTC
$25.00
$100
$24.00 10
$250
$23.00 20
$420
$22.00 30
$600
$21.00 40
$780
$20.00 50
$970
$19.00 60
$1,170
In order to maximize profit, the above firm should produce where:
Select one:
a. Marginal Revenue = Marginal Cost
b. Price= Average Total Cost
C. Price = Marginal Cost
d. Economic profit= zero

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