Question

1. The table below shows part of the cost structure (total fixed cost, total variable cost, and total cost) for a typical producer of olive oil -- a perfectly competitive industry.

1. Copy the table into Excel and use it to calculate average total cost and marginal cost for all quantities from 1 to 10. Use Excel (following the hints in QSet 2, #9) to produce a diagram of the firm’s average total cost and marginal cost curves.

2. If the price of oil is $10 a bottle, approximately what quantity will this producer make? (You will get credit for answering anywhere within 0.2 units of the correct answer.)

Q	TFC	TVC	TC
0	10	0	10
1	10	8	18
2	10	14	24
3	10	18	28
4	10	24	34
5	10	32	42
6	10	43	53
7	10	58	68
8	10	78	88
9	10	104	114
10	10	137	147

Answer 1

Answer:

ATC = TC/Q

MC = TCn - TCn-1

Q	TFC	TVC	TC	ATC	MC
0	10	0	10	0	10
1	10	8	18	18	8
2	10	14	24	12	6
3	10	18	28	9.33	4
4	10	24	34	8.50	6
5	10	32	42	8.40	8
6	10	43	53	8.83	11
7	10	58	68	9.71	15
8	10	78	88	11	20
9 10	10 10	104 137	114 147	12.67 14.70	26 33

If the price of oil is $10 a bottle, approximately what quantity will this producer make?

y Date : 34 Page No.: Me 32 30 20 24 22 20 18 10 ATC 14 COST 2. to 8 6 4 2 8 9 lo Х 2 3 4 5 6 7 OUTPUT

Answer:

Q	MC	TR= AR/Q	MR=TRn-TRn-1
0	10	0	0
1	8	10	10
2	6	20	10
3	4	30	10
4	6	40	10
5	8	50	10
6	11	60	10
7	15	70	10
8	20	80	10
9 10	26 33	90 100	10 10

*AR = Price.

Here,MC can't be equal to MR .

$10 is his Fixed Cost,he will not earn any profits.

So,he will not produce at the price of $10 .

Thank you!