The Frank-Heggood Consulting Company charges clients $\$ 100$ per hour. The maximum number of hours of consulting It can provide each day is 12 hours. The marginal cost of each hour of consulting is given in the table below.
\begin{tabular}{llll}
Price & $Q$ (hours) & Marginal cost $(M C)$ & Marginal Revenue $(M R)$ \
\hline$\$ 100$ & 1 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 2 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 3 & $\$ 20$ & $\$ 100$ \
$\$ 100$ & 4 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 5 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 6 & $\$ 50$ & $\$ 100$ \
$\$ 100$ & 7 & $\$ 60$ & $\$ 100$ \
$\$ 100$ & 8 & $\$ 70$ & $\$ 100$ \
$\$ 100$ & 9 & $\$ 80$ & $\$ 100$ \
$\$ 100$ & 10 & $\$ 90$ & $\$ 100$ \
$\$ 100$ & 11 & $\$ 100$ & $\$ 100$ \
$\$ 100$ & 12 & $\$ 110$ & $\$ 100$
\end{tabular}

If the Frank-Heggood Consulting Company wants to maximize profits, how many hours of consulting should it provide each day?

Choose 1 answer:
(A) 9
(B) 11
(C) 12
(D) 10
(E) 8
Report a problen

Question

The Frank-Heggood Consulting Company charges clients $\$ 100$ per hour. The maximum number of hours of consulting It can provide each day is 12 hours. The marginal cost of each hour of consulting is given in the table below.
\begin{tabular}{llll} 
Price & $Q$ (hours) & Marginal cost $(M C)$ & Marginal Revenue $(M R)$ \
\hline$\$ 100$ & 1 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 2 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 3 & $\$ 20$ & $\$ 100$ \
$\$ 100$ & 4 & $\$ 30$ & $\$ 100$ \
$\$ 100$ & 5 & $\$ 40$ & $\$ 100$ \
$\$ 100$ & 6 & $\$ 50$ & $\$ 100$ \
$\$ 100$ & 7 & $\$ 60$ & $\$ 100$ \
$\$ 100$ & 8 & $\$ 70$ & $\$ 100$ \
$\$ 100$ & 9 & $\$ 80$ & $\$ 100$ \
$\$ 100$ & 10 & $\$ 90$ & $\$ 100$ \
$\$ 100$ & 11 & $\$ 100$ & $\$ 100$ \
$\$ 100$ & 12 & $\$ 110$ & $\$ 100$
\end{tabular}

If the Frank-Heggood Consulting Company wants to maximize profits, how many hours of consulting should it provide each day?

Choose 1 answer:
(A) 9
(B) 11
(C) 12
(D) 10
(E) 8
Report a problen

Accepted Answer

∻Solution∻ ‖ a ⋮ Profit Maximization Condition: To maximize profits, the firm should produce where Marginal Revenue (MR) equals Marginal Cost (MC). ‖ ‖ b ⋮ Given Data: The table provides the Marginal Cost (MC) and Marginal Revenue (MR) for different quantities of hours. ‖ ‖ c ⋮ Analysis: We need to find the quantity where $MR = MC$. From the table: - At 1 hour: $MC = 40$, $MR = 100$ - At 2 hours: $MC = 30$, $MR = 100$ - At 3 hours: $MC = 20$, $MR = 100$ - At 4 hours: $MC = 30$, $MR = 100$ - At 5 hours: $MC = 40$, $MR = 100$ - At 6 hours: $MC = 50$, $MR = 100$ - At 7 hours: $MC = 60$, $MR = 100$ - At 8 hours: $MC = 70$, $MR = 100$ - At 9 hours: $MC = 80$, $MR = 100$ - At 10 hours: $MC = 90$, $MR = 100$ - At 11 hours: $MC = 100$, $MR = 100$ - At 12 hours: $MC = 110$, $MR = 100$ The quantity where $MR = MC$ is at 11 hours. ‖ ∻Answer∻ ⚹ (B) 11 ⚹ ∻Key Concept∻ ⚹ Profit Maximization ⚹ ∻Explanation∻ ⚹ The firm maximizes profit by producing the quantity where Marginal Revenue equals Marginal Cost. In this case, it is at 11 hours. ⚹◊What is the formula for calculating profit in Microeconomics?⍭ Generate me a similar question◊

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