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    Cs 30

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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 at different output levels for a firm. 2. At a quantity of 14 units, total profits are 108.72. So the firm will enjoy economic profits. 3. At a price of $35, total profits are negative. The contribution margin at 14 units is negative, so the firm should shut down operations.

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    Cs 30

    Uploaded by

    Ammar Akhter Uz Zaman
    10 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 at different output levels for a firm. 2. At a quantity of 14 units, total profits are 108.72. So the firm will enjoy economic profits. 3. At a price of $35, total profits are negative. The contribution margin at 14 units is negative, so the firm should shut down 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 at different output levels for a firm. 2. At a quantity of 14 units, total profits are 108.72. So the firm will enjoy economic profits. 3. At a price of $35, total profits are negative. The contribution margin at 14 units is negative, so the firm should shut down operations.

    Copyright:

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

    Cs 30

    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 at different output levels for a firm. 2. At a quantity of 14 units, total profits are 108.72. So the firm will enjoy economic profits. 3. At a price of $35, total profits are negative. The contribution margin at 14 units is negative, so the firm should shut down 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 30.70 290.00 50.00 2610 469.89 2140.11 19.30 Cost Curves
    10 40.00 50.00 30.10 290.00 50.00 2900 500 2400 19.90 60.00
    11 39.10 48.19 30.10 290.00 50.00 3190 530.09 2659.91 19.90
    12 38.40 46.73 30.70 290.00 50.00 3480 560.76 2919.24 19.30
    13 37.90 45.59 31.90 290.00 50.00 3770 592.67 3177.33 18.10
    14 37.60 44.74 33.70 290.00 50.00 4060 626.36 3433.64 16.30 50.00
    15 37.50 44.17 36.10 290.00 50.00 4350 662.55 3687.45 13.90
    16 37.60 43.85 39.10 290.00 50.00 4640 701.6 3938.4 10.90
    17 37.90 43.78 42.70 290.00 50.00 4930 744.26 4185.74 7.30
    40.00
    18 38.40 43.96 46.90 290.00 50.00 5220 791.28 4428.72 3.10
    19 39.10 44.36 51.70 290.00 50.00 5510 842.84 4667.16 -1.70
    20 40.00 45.00 57.10 290.00 50.00 5800 900 4900 -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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