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    Cs 26

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    Ammar Akhter Uz Zaman
    1. The table shows production quantities (Q), average variable costs (AVC), average costs (AC), marginal costs (MC), price (P), marginal revenue (MR), total revenue (TR), total costs (TC) and profits for a firm. 2. Total profit for the firm is Rs. 108.72, so the firm will enjoy economic profits. 3. For the second table with a lower price of Rs. 35, total profit is negative Rs. 36.4. So the firm must shutdown its operations.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Cs 26

    Uploaded by

    Ammar Akhter Uz Zaman
    7 views1 page
    1. The table shows production quantities (Q), average variable costs (AVC), average costs (AC), marginal costs (MC), price (P), marginal revenue (MR), total revenue (TR), total costs (TC) and profits for a firm. 2. Total profit for the firm is Rs. 108.72, so the firm will enjoy economic profits. 3. For the second table with a lower price of Rs. 35, total profit is negative Rs. 36.4. So the firm must shutdown its operations.

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    1. The table shows production quantities (Q), average variable costs (AVC), average costs (AC), marginal costs (MC), price (P), marginal revenue (MR), total revenue (TR), total costs (TC) and profits for a firm. 2. Total profit for the firm is Rs. 108.72, so the firm will enjoy economic profits. 3. For the second table with a lower price of Rs. 35, total profit is negative Rs. 36.4. So the firm must shutdown its operations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    7 views1 page

    Cs 26

    Uploaded by

    Ammar Akhter Uz Zaman
    1. The table shows production quantities (Q), average variable costs (AVC), average costs (AC), marginal costs (MC), price (P), marginal revenue (MR), total revenue (TR), total costs (TC) and profits for a firm. 2. Total profit for the firm is Rs. 108.72, so the firm will enjoy economic profits. 3. For the second table with a lower price of Rs. 35, total profit is negative Rs. 36.4. So the firm must shutdown its operations.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 1

    Q4

    Q AVC AC MC P MR TR TC Total Profit Marginal Profit


    9 41.10 52.21 30.70 286.00 50.00 2574 469.89 2104.11 19.30 Cost Curves
    10 40.00 50.00 30.10 286.00 50.00 2860 500 2360 19.90 60.00
    11 39.10 48.19 30.10 286.00 50.00 3146 530.09 2615.91 19.90
    12 38.40 46.73 30.70 286.00 50.00 3432 560.76 2871.24 19.30
    13 37.90 45.59 31.90 286.00 50.00 3718 592.67 3125.33 18.10
    14 37.60 44.74 33.70 286.00 50.00 4004 626.36 3377.64 16.30 50.00
    15 37.50 44.17 36.10 286.00 50.00 4290 662.55 3627.45 13.90
    16 37.60 43.85 39.10 286.00 50.00 4576 701.6 3874.4 10.90
    17 37.90 43.78 42.70 286.00 50.00 4862 744.26 4117.74 7.30
    40.00
    18 38.40 43.96 46.90 286.00 50.00 5148 791.28 4356.72 3.10
    19 39.10 44.36 51.70 286.00 50.00 5434 842.84 4591.16 -1.70
    20 40.00 45.00 57.10 286.00 50.00 5720 900 4820 -7.10

    Cost ($)
    30.00 AVC
    AC
    MC
    Ans Q4 (B)
    20.00
    Total profit = 108.72

    So the firm will Enjoy Economic Profits


    10.00

    0.00
    0 5 10 15 20 25
    Quantity

    Cost Curves
    60.00
    Q AVC AC MC P MR TR TC Total Profit Marginal Profit
    9 41.10 52.21 30.70 35.00 35.00 315 469.89 -154.89 4.30
    10 40.00 50.00 30.10 35.00 35.00 350 500 -150 4.90
    11 39.10 48.19 30.10 35.00 35.00 385 530.09 -145.09 4.90 50.00
    12 38.40 46.73 30.70 35.00 35.00 420 560.76 -140.76 4.30
    13 37.90 45.59 31.90 35.00 35.00 455 592.67 -137.67 3.10
    14 37.60 44.74 33.70 35.00 35.00 490 626.36 -136.36 1.30
    15 37.50 44.17 36.10 35.00 35.00 525 662.55 -137.55 -1.10 40.00
    16 37.60 43.85 39.10 35.00 35.00 560 701.6 -141.6 -4.10
    17 37.90 43.78 42.70 35.00 35.00 595 744.26 -149.26 -7.70
    18 38.40 43.96 46.90 35.00 35.00 630 791.28 -161.28 -11.90
    Cost ($)

    19 39.10 44.36 51.70 35.00 35.00 665 842.84 -177.84 -16.70 30.00 AVC
    20 40.00 45.00 57.10 35.00 35.00 700 900 -200 -22.10 AC
    MC

    20.00

    Ans Q4 (C)

    Total profit = 108.72


    10.00
    CM = TR - TVC = 490 - (37.6 x 14) = -36.4

    So the firm must Shutdown its operation


    0.00
    0 5 10 15 20 25
    Quantity

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