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

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

Rahul Sunny answered 1 year ago

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