Question

I am lost. How would i do these? please show how you got the answer.

Perfect Competition Waldhet This is a combination of chapter 7 and 8 which includes the free possible market outcomes that were presented in the textbook. Complete the following worksheets and answer the questions Fach sheet Pives you the Price above the table and a complete Total Cost com Given that information you should be able to fill in the rest of the worksheet. You may want to review my "Product and Cost Formulas and Rales" and "Perfect Competition Formalas and Rules Commentaries before attempting this Table 1 Price - Total That Fixed Variable Average Variable Marginal Cost To Marginal Profilor Reverse Revue Los IIIIIIIII IIIIIIIII LIIIIIIII IIIIIIIII III|||||||| What is the optimum level of production in units

Answer 1

At Q=0, there is no production, therefore the entire cost is fixed cost, variable cost will only be there if there is production. Fixed cost will remain constant and variable cost will change. Formulas to calculate others are as follows:

Table 1:

Total Product	Fixed Cost	Variable Cost	Total Cost	Average Variable Cost	Marginal Cost	Total Revenue	Marginal Revenue	Profit or Loss	Price
Q	FC	VC	TC	AVC	MC	TR	MR	Pr	P
		TC-FC		VC/Q	TC - TC(-1)	P*Q	TR - TR(-1)	TR-TC	56
0	60	0	60
1	60	45	105	45.00	45	56	56	-49
2	60	85	145	42.50	40	112	56	-33
3	60	120	180	40.00	35	168	56	-12
4	60	150	210	37.50	30	224	56	14
5	60	185	245	37.00	35	280	56	35
6	60	225	285	37.50	40	336	56	51
7	60	270	330	38.57	45	392	56	62
8	60	325	385	40.63	55	448	56	63
9	60	390	450	43.33	65	504	56	54
10	60	465	525	46.50	75	560	56	35

Optimum level of production is the level at which profit is maximized i.e. Q = 8

Profit = 63

Company shall produce as the revenue > variable cost

Table 2:

Total Product	Fixed Cost	Variable Cost	Total Cost	Average Variable Cost	Marginal Cost	Total Revenue	Marginal Revenue	Profit or Loss	Price
Q	FC	VC	TC	AVC	MC	TR	MR	Pr	P
		TC-FC		VC/Q	TC - TC(-1)	P*Q	TR - TR(-1)	TR-TC	41
0	60	0	60
1	60	45	105	45.00	45	41	41	-64
2	60	85	145	42.50	40	82	41	-63
3	60	120	180	40.00	35	123	41	-57
4	60	150	210	37.50	30	164	41	-46
5	60	185	245	37.00	35	205	41	-40
6	60	225	285	37.50	40	246	41	-39
7	60	270	330	38.57	45	287	41	-43
8	60	325	385	40.63	55	328	41	-57
9	60	390	450	43.33	65	369	41	-81
10	60	465	525	46.50	75	410	41	-115

Optimum level of production is the level at which profit is maximized or loss is minimized i.e. Q = 6

Profit = -39

It may produce at quantities where revenue > variable cost

Table 3:

Total Product	Fixed Cost	Variable Cost	Total Cost	Average Variable Cost	Marginal Cost	Total Revenue	Marginal Revenue	Profit or Loss	Price
Q	FC	VC	TC	AVC	MC	TR	MR	Pr	P
		TC-FC		VC/Q	TC - TC(-1)	P*Q	TR - TR(-1)	TR-TC	32
0	60	0	60
1	60	45	105	45.00	45	32	32	-73
2	60	85	145	42.50	40	64	32	-81
3	60	120	180	40.00	35	96	32	-84
4	60	150	210	37.50	30	128	32	-82
5	60	185	245	37.00	35	160	32	-85
6	60	225	285	37.50	40	192	32	-93
7	60	270	330	38.57	45	224	32	-106
8	60	325	385	40.63	55	256	32	-129
9	60	390	450	43.33	65	288	32	-162
10	60	465	525	46.50	75	320	32	-205

Optimum level of production is the level at which profit is maximized or loss is minimized i.e. Q = 1

Profit = -73

Company shall not produce as revenue for all units < variable cost