# VWX.Clinic offers a dentistry

 VWX.Clinic offers a dentistry treatment. You are the manager, the owner asks you how much to charge tomaximize profits. The demand curve for the treatments and their total costs aregiven in table 1. a. For each level of output, calculate total revenue, marginalrevenue, average cost, and marginal cost. b. What is the profit-maximizing level of output for thetreatments and how much will the firm earn in profits?

Table 1

 Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Average Cost 0 431250 6375000 20 375000 7500000 30 337500 9000000 40 300000 10875000 50 262500 13125000 60 225000 15750000 70 187500 19125000 80 150000 24000000

 Quantity Price Total Revenue Marginal Revenue Total Cost Marginal Cost Average Cost Profit 0 431250 0 6375000 -6375000 20 375000 7500000 375000 7500000 56250 375000.00 0 30 337500 10125000 262500 9000000 150000 300000.00 1125000 40 300000 12000000 187500 10875000 187500 271875.00 1125000 50 262500 13125000 112500 13125000 225000 262500.00 0 60 225000 13500000 37500 15750000 262500 262500.00 -2250000 70 187500 13125000 -37500 19125000 337500 273214.29 -6000000 80 150000 12000000 -112500 24000000 487500 300000.00 -12000000

a. Total Revenue (Quantity*Price),Marginal Revenue (Change in total revenue/change in quantity), andMarginal Cost (Change in total cost/Change in Quantity), Averagecost (Total cost/Quantity) are shown in the table above

b. Profit gets maximised where MC=MRand it is at quantity 40 and profit is \$ 11,25,000

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