ib-economics-quantitative

) Firm BQuantity Price AVC ATC300 $30 $24 $28c) Firm CQuantity Price AVC ATC250 $20 $22 $25d) Firm DQuantity Price AVC ATC200 $20 $18 $20Calculate from a set of data and/or diagrams the revenue maximizing level of output.Step 1Revenue is maximised when a firm produces at a level of output where marginal revenue(MR) is equal to zero.In either a set of data or a diagram, it is simply necessary to identify the level of output whereMR = 0 and this will be the revenue maximising level of output.E.g.In the table below, MR is at zero between 35 and 45 units. This is the revenuemaximising level of output. The output is 40 units and the total revenue ismaximised at $1,600.Quantitysold (q)Price(p)Averagerevenue (AR)Totalrevenue (TR)0 - - - -7010 70 7005020 60 12003030 50 50 15001040 40 1600-1050 30 1500-3060 20 120070 10Marginalrevenue (MR)80 - - - -Produced by Ian Dorton & Jocelyn Blink Page 40