Exotic Metals, Inc., a leading manufacturer of beryllium, which is used in many electronic products, estimates the following demand schedule for its product. Find the total revenue and marginal revenue schedules for the firm and complete the following table. Price Quantity Total Revenue Marginal Revenue ($/Pound) (Pound/Period) ($/Period) ($/Period) 25 0 0 18 1,000 18,000 18.00 16 2,000 14 3,000 12 4,000 10 5,000 8 6,000 6 7,000 4 8,000 2 9,000 Fixed costs of manufacturing beryllium are $14,000 per period. The firm’s variable cost schedule is as follows: Determine the average total cost and marginal cost schedules for the firm and complete the following table. Output Variable Cost Total Cost Marginal Cost (Pound/Period) (Per Pound) ($/Period) ($/Period) 0 0 0 1,000 10.00 24,000 24.00 2,000 8.50 3,000 7.33 4,000 6.25 5,000 5.40 6,000 5.00 7,000 5.14 8,000 5.88 9,000 7.00 Exotic Metals maximizes profits when the price is per pound and the output level is pounds per period. What is Exotic’s profit (or loss) at the profit-maximizing output level? . Suppose that the federal government announces it will sell beryllium, from its extensive wartime stockpile, to anyone who wants it at $5.98 per pound. Under these conditions, Exotic Metals maximizes profits by producing pounds per period.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter5: Buying The Necessities

Section: Chapter Questions

Problem 20AA

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Exotic Metals, Inc., a leading manufacturer of beryllium, which is used in many electronic products, estimates the following demand schedule for its product.

Find the total revenue and marginal revenue schedules for the firm and complete the following table.

Price	Quantity	Total Revenue	Marginal Revenue
($/Pound)	(Pound/Period)	($/Period)	($/Period)
25	0	0
18	1,000	18,000	18.00
16	2,000
14	3,000
12	4,000
10	5,000
8	6,000
6	7,000
4	8,000
2	9,000

Fixed costs of manufacturing beryllium are $14,000 per period. The firm’s variable cost schedule is as follows:

Determine the average total cost and marginal cost schedules for the firm and complete the following table.

Output	Variable Cost	Total Cost	Marginal Cost
(Pound/Period)	(Per Pound)	($/Period)	($/Period)
0	0	0
1,000	10.00	24,000	24.00
2,000	8.50
3,000	7.33
4,000	6.25
5,000	5.40
6,000	5.00
7,000	5.14
8,000	5.88
9,000	7.00

Exotic Metals maximizes profits when the price is

per pound and the output level is

pounds per period.

What is Exotic’s profit (or loss) at the profit-maximizing output level?

Suppose that the federal government announces it will sell beryllium, from its extensive wartime stockpile, to anyone who wants it at $5.98 per pound. Under these conditions, Exotic Metals maximizes profits by producing

pounds per period.

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