Question
In: Economics
Assume Gilead faces the following cost structure regarding the production of Sovaldi. Complete the table below....
Assume Gilead faces the following cost structure regarding the production of Sovaldi. Complete the table below.
|
Output (# pills) |
Total Fixed Cost |
Total Variable Cost |
Total Cost |
Average Variable Cost |
Average Fixed Cost |
Marginal Cost |
|
0 |
||||||
|
200,000 |
750 |
500 |
||||
|
400,000 |
400 |
|||||
|
600,000 |
450 |
|||||
|
800,000 |
500 |
|||||
|
1,000,000 |
550 |
|||||
|
1,200,000 |
700 |
|||||
|
1,400,000 |
900 |
|||||
|
1,600,000 |
1,250 |
|||||
|
1,800,000 |
1,500 |
|||||
|
2,000,000 |
2,500 |
|||||
|
2,200,000 |
3,000 |
|||||
|
2,400,000 |
3,750 |
|||||
|
2,600,000 |
5,000 |
|||||
|
2,800,000 |
5,500 |
|||||
|
3,000,000 |
6,000 |
Solutions
Expert Solution
MC= (TVC2-TVC1)/(Q2-Q1)
TVC1 = MC*(Q2-Q1)+TVC2
TC= TVC+TFC
TFC= AFC*Q
AFC=TFC/Q
|
Output (# pills) |
Total Fixed Cost |
Total Variable Cost |
Total Cost |
Average Variable Cost |
Average Fixed Cost |
Marginal Cost |
|
0 |
150000000 |
0 |
150000000 |
|||
|
2,00,000 |
150000000 |
100000000 |
250000000 |
500.00 |
750.00 |
500 |
|
4,00,000 |
150000000 |
180000000 |
330000000 |
450.00 |
375.00 |
400 |
|
6,00,000 |
150000000 |
270000000 |
420000000 |
450.00 |
250.00 |
450 |
|
8,00,000 |
150000000 |
370000000 |
520000000 |
462.50 |
187.50 |
500 |
|
10,00,000 |
150000000 |
480000000 |
630000000 |
480.00 |
150.00 |
550 |
|
12,00,000 |
150000000 |
620000000 |
770000000 |
516.67 |
125.00 |
700 |
|
14,00,000 |
150000000 |
800000000 |
950000000 |
571.43 |
107.14 |
900 |
|
16,00,000 |
150000000 |
1050000000 |
1200000000 |
656.25 |
93.75 |
1,250 |
|
18,00,000 |
150000000 |
1350000000 |
1500000000 |
750.00 |
83.33 |
1,500 |
|
20,00,000 |
150000000 |
1850000000 |
2000000000 |
925.00 |
75.00 |
2,500 |
|
22,00,000 |
150000000 |
2450000000 |
2600000000 |
1113.64 |
68.18 |
3,000 |
|
24,00,000 |
150000000 |
3200000000 |
3350000000 |
1333.33 |
62.50 |
3,750 |
|
26,00,000 |
150000000 |
4200000000 |
4350000000 |
1615.38 |
57.69 |
5,000 |
|
28,00,000 |
150000000 |
5300000000 |
5450000000 |
1892.86 |
53.57 |
5,500 |
|
30,00,000 |
150000000 |
6500000000 |
6650000000 |
2166.67 |
50.00 |
6,000 |
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