# Calculating output, price, total revenue and total profit.

P = $130 - $0.000125Q

MR - $130 - 0.00025

Fixed development cost = $600,000

Marginal costs are $63 per unit.

Calculate output, price, total revenue and total profit at the revenue maximizing activity level and then at the profit maximizing level (present each with relevant diagrams).

© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/economics/macroeconomics/calculating-output-price-total-revenue-and-total-profit-27h#### Solution Preview

...= Total Cost, Q = Output level, Q* = Profit maximizing output level, P = Price level, MR = Marginal Revenue, and MC = Marginal Cost.

Now, putting the value of Q = 268,000 in the demand function P = 130 - 0.000125Q, we get the value of P* = 130 - 0.000125 (268,000) = 96.5

And, we know that TR = P x Q = (96.5)(268,000) = 25,862,000

So, ...