Question
In: Economics
At a quantity of 265 units marginal revenue equals marginal cost. Fixed cost is $2,500, the Total Variable cost is $9,500, and the total revenue is $11,000.
At a quantity of 265 units marginal revenue equals marginal cost. Fixed cost is $2,500, the Total Variable cost is $9,500, and the total revenue is $11,000. Calculate the average fixed cost, average variable cost, average total cost and marginal revenue. Should the company shut down or stay in business in the short run? In the long run?
Solutions
Expert Solution
At a quantity of 265 units marginal revenue equals marginal cost. Fixed cost is $2,500, the Total Variable cost is $9,500, and the total revenue is $11,000.
At a quantity of 265 units marginal revenue equals marginal cost.
Fixed cost is $2,500,
the Total Variable Cost is $9,500 and the Total Revenue is $11,000.
AFC=2500/265
=$9.433
AVC=9500/265
=$35.849
P=AR=MR=TR/Q
=11,000/265
=$41.50
Since Q=265 units,
AVC=$35.849
Shut-down condition is
P=MC=minimum of AVC
Since at this quantity total revenue is $11,000 and total variable cost is $9,500, so it means firm is able to cover even variable cost, so firm should continue to produce in the short-run but shut-down in the long-run because in the long-run all factors of production are variable.
Rahul Sunny answered 2 years agoRelated Solutions
At a quantity of 375 units marginal revenue equals marginal cost. Fixed cost is $1000, the Total Variable Cost is $7,000 and the Total Revenue is $6000.
At a quantity of 375 units marginal revenue equals marginal
cost. Fixed cost is $1000, the Total Variable Cost is $7,000 and
the Total Revenue is $6000. Calculate the average fixed cost,
average variable cost, average total cost and marginal
revenue. Should the company shut down or stay in
business?
Quantity Total Revenue Marginal Revenue Total Cost Marginal Cost Fixed Costs ATC Average Fixed Costs Average...
Quantity
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Fixed Costs
ATC
Average Fixed Costs
Average Variable Costs
0
0
-
10
-
10
-
-
-
1
8
24
14
24
2
16
34
10
17
3
24
42
8
14
4
32
49
7
12.25
5
40
57
8
11.4
6
48
67
10
11.17
7
56
81
14
11.57
8
64
99
18
12.38
9
72
123
24
13.67
1b. At a price of $14, what is...
marginal revenue equals marginal cost to maximize total revenue
marginal revenue equals marginal cost to maximize total
revenue
Give examples of how to calculate total revenue, total cost, variable cost, fixed cost, marginal cost,...
Give examples of how to calculate total revenue, total cost,
variable cost, fixed cost, marginal cost, ATC, AFC, and AVC.
What is the water-diamond paradox?
Define the following: fixed cost, variable cost, marginal cost and marginal revenue
Define the following: fixed cost, variable cost, marginal cost
and marginal revenue
Question 1 Output total cost marginal cost fixed cost average cost Total revenue average revenue Marginal...
Question 1
Output
total cost
marginal cost
fixed cost
average cost
Total revenue
average revenue
Marginal
revenue
0
10
0
1
16
20
2
26
40
3
40
60
4
60
80
5
88
100
6
120
120
A) Complete the missing data on the table
B) What is the selling price of a laptop case explain your
answer
c) What is the profit maximizing level of output for this firm
explain your answer
d) create a graph using three...
1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost....
1. Firm X is producing the quantity of output at which marginal
revenue equals marginal cost. It is earning
A. a positive economic profit.
B. an economic loss.
C. a normal profit.
D,There is not enough information to answer the question.
2. A perfectly competitive firm will always maximize short-run
profits by producing the level of output where the average total
cost is minimized.
A.True
B.False
For a monopolist: Price is greater than marginal revenue. Marginal revenue equals zero. Marginal cost equals...
For a monopolist:
Price is greater than marginal revenue.
Marginal revenue equals zero.
Marginal cost equals zero.
Average total cost equals marginal cost.
Complete the following cost and revenue schedule. Price Quantity Demanded Total Revenue Marginal Revenue Total...
Complete the following cost and revenue schedule.
Price
Quantity Demanded
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Average Total Cost
200
0
240
180
10
360
160
20
500
140
30
660
120
40
840
100
50
1040
80
60
1260
60
70
1500
40
80
1760
20
90
2040
a. At what rate of output are profits maximized within this
range?
b. What are total profits at that output rate?
Quantity Total Cost Total Fixed Cost Total Variable Cost Average Fixed Cost Average Total Cost Average...
Quantity
Total Cost
Total Fixed Cost
Total Variable Cost
Average Fixed Cost
Average Total Cost
Average Variable Cost
Marginal Cost
0
30
1
75
2
150
3
255
4
380
5
525
6
680
7
840
8
1010
9
1200
Given the quantity and total cost, calculate for total fixed
cost, total variable cost, average fixed cost, average total cost,
average variable cost, and marginal cost.
Excel formulas would be nice but not required.
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