Jim Whitney Economics 102
 Profit Maximization: Worksheet 1
 
Suppose you have a costume firm with the cost structure given in the table below. You are a perfectly competitive firm, so you can sell as many Halloween costumes as you want at whatever the going market price is.

Step 1:
1. Form a group of four students. Have each group member fill out one set of columns below:

Name:  __________  __________  __________  __________
Output price: $13 $10 $7 $6
Q TFC TVC TC TR Profit TR Profit TR Profit TR Profit
0 13 0 13                
1 13 9 22                
2 13 14 27                
3 13 20 33                
4 13 27 40                
5 13 37 50                
6 13 50 63                
7 13 67 80                

Step 2:
    2. In your group, share your results from part 1, and agree on the most profitable output to supply at each price (in the case of a tie, choose the higher of the two output levels). Complete the following table: 
Possible output price Qs TR TC Profit
$13        
10        
7        
6        
 
     3. In the diagram, plot TC, and your alternative TR lines. Label your output level at each price: