Marginal Cost - Economics?

Question

. The table gives the demand schedule for water bottled by Wanda's Healthy Waters. If the marginal cost is a constant $5 a bottle, Wanda's will produce _________ a day and charge ____________ a bottle. (Be careful...you need to calculate MR).

Price Per Bottle(Dollars Per Bottle) --------- Quantity Demanded Per Day

10 - 0

9 - 1

8 - 2

7 - 3

6 - 4

5 - 5

4 - 6

1 bottle; $9

5 bottles; $5

4 bottles; $6

3 bottles; $7

Answer 1

MR=MC

MC is constant at 5, so we need to find where marginal revenue equals 5

at p=9, MR is 9

at p=8, MR is 16-9=7

at p=7, MR is 21-16=5

3 bottles; $7