Profit Answers
Using this table, calculate the profit at each level of bicycle production.
The fourth bike: $[___]
20
The sixth bike: $[___]
50
The seventh bike: $[___]
60
Five bikes: $[___]
90
Six bikes: $[___]
90
Seven bikes: $[___]
80
Using this table, calculate the marginal cost of each of these quantities of bikes.
This graph shows the marginal cost of producing each bike. Select the correct answer from the options available.Based on this graph, which bike has a marginal cost of $20?
One bike: -$[___]
30
This graph shows the marginal costs of each bike, along with the market price. Select the correct answer from the options available.Based on this graph, at which level of production does the producer’s profit stop increasing?
Write three to five sentences explaining which levels of production provide Alonzo’s Cycling with the maximum profit.
The maximum profit is $90, which occurs when Alonzo’s Cycling produces either 5 or 6 bikes per day. At 5 bikes, the company earns $250 in revenue and has costs of $160. At 6 bikes, it earns $300 in revenue and has costs of $210. Producing 7 bikes lowers the profit to $80, so producing 5 or 6 bikes is best.
Which of these arguments did you include in your response? Check all that apply.
Demand for bikes has suddenly increased, and the market price has risen from $50 to $60.In three to five sentences, explain how this change will affect profits.
The first bike: $[___]
80
This graph shows the marginal cost of producing each bike. Select the correct answer from the options available.Based on this graph, which bike has a marginal cost of $20?
This graph shows the marginal costs of each bike, along with the market price. Select the correct answer from the options available.Based on this graph, at which level of production does the producer’s profit stop increasing?
Which of these arguments did you include in your response? Check all that apply.
Write three to five sentences explaining which levels of production provide Alonzo’s Cycling with the maximum profit.
Alonzo’s Cycling earns the maximum profit of $90 by producing either 5 or 6 bikes per day. The profit is the same at both production levels. No other level shown in the table provides a higher profit.
Two bikes: $[___]
3
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