Tiny Toads LLC sells birthday cakes for $50 each. Fixed costs of production are $15. The average variable costs are $15 for one birthday cake, $20 for two units, $25 for the three units, $31¼ for four units, and $40 for five units.
(a) In the form of a table, calculate total revenue, marginal revenue, total cost, average variable cost, average fixed cost, average total cost, and marginal cost for each output level (one to five units).
(b) What is the profit-maximizing quantity of output?
(c) On one diagram, sketch the total revenue and total cost curves.
(d) On another diagram, sketch the marginal revenue, marginal cost, average variable cost, average total cost, and average fixed cost curves.