Question

  

Labor TVC TC MC AFC AVC ATC 25 50 75 100 25 125 (a) Complete the blank columns (5 points). Please create a table like mine and fill it. (b) Assume the price of this product equals $10. What's the profit-maximizing output (q)? (3 points). Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing a where P=MC.(2 points) (c) What is the profit? (3 points)

Answer 1

Labou q TFC Tuc TC Me AFC AVC ATC 1 2 3 24 5 4 10 13 15 16 25 25 25 25 25 25 50 75 100 125 50 75 loo 125 150 6.25 4.167 8333 12.5 25 6.25 2.5 1.92 1.67 1.56 6.25 5 5.77 6.67 7.81 12.5 7.5 7.69 8.33 9.375 TCF TFC+TUCI MC= DTC DQ AFC = TEC AUC TUC АТС TC b.) Profit maximizing output, where P = MC. It can be where P> MC. It is satisfied at q=13 Profit-maximizing outputis q-3.

Total Cost - - = - Total Revenue- Pxq – TC 10x13- loo 130-100 $30