MARK HIRSCHEY 10 E Power Point Presentation by

MARK HIRSCHEY 10 E Power. Point Presentation by Charlie Managerial Economics 10 e Cook MANAGERIAL ECONOMICS Chapter 2 Economic Optimization © 2003 South-Western/Thomson Learning

Relation Between Total Revenue and Output Table 2. 1 Total Revenue $1. 50 3. 00 4. 50 6. 00 7. 50 9. 00 Output 1 2 3 4 5 6 Figure 2. 1 Managerial Economics 10 e 2

Geometric Representation of Total, Marginal, and Average Relations: Total Profits Figure 2. 2 A Managerial Economics 10 e 3

Geometric Representation of Total, Marginal, and Average Relations: Marginal and Average Profits Figure 2. 2 B Managerial Economics 10 e 4

Changing over the Range of a Curve Figure 2. 3 Managerial Economics 10 e 5

A Derivative as the Slope of a Curve Figure 2. 4 Managerial Economics 10 e 6

Profit as a Function of Output Figure 2. 5 Managerial Economics 10 e 7

Locating Maximum and Minimum Values of a Function Figure 2. 6 Managerial Economics 10 e 8

Total Revenue, Total Cost, and Profit Maximization Figure 2. 7 Managerial Economics 10 e 9

Profit-Maximizing Output Conditions Figure 2. 8 Managerial Economics 10 e 10

Profit Versus Revenue Maximization Figure ST 2. 1 Managerial Economics 10 e 11

Average Cost Minimization Figure ST 2. 2 Managerial Economics 10 e 12

Finding the Maximum of a Function of Two Variables: Q = 5, 000 - 10 P + 40 A + PA - 0. 8 A 2 - 0. 5 P 2 Figure 2 A. 1 Managerial Economics 10 e 13

The Role of Constraints in Profit Maximization Figure 2 A. 2 Managerial Economics 10 e 14