Question

k. The following table shows the revenue and cost information for a firm in a competitive market. a) Fill in the missing information. $Price $Total Revenue Marginal Revenue SMC 80 Quantity 0 5 10 15 20 25 30 $Total Cost 100 600 1,075 1,525 1,925 2,525 3,525 b) Based on this information, what are the firm's fixed costs? How do you know? c) What quantity is the firm's profit maximizing quantity? Explain. d) Graph the total revenue and the total cost curves on a graph. Show that profit is maximized at the quantity you have determined in part c. e) Graph the marginal revenue and the MC curves using the midpoint method for MC. Do these curves intersect at the quantity you would expect? Explain.

Answer 1

CIASSMAte Date Page IQ P TR MR Тc. Mc LEC 100 400 80 600 400 80 10 15 80 80 80 80 80 400 800 1200 1600 2000 100 100 100 44185595 lod 100 400 80 1 100 40v 80 to go 108 1825 1925 2525 3525 80 40080 100 30 80 2400 90080 TODO 200 100 formulas used above are: TR MRn TRn_TRA-1/Qn-On-l Ten-Ten-1 / On-On-l MC one = A b) at Q=0 TC = 100 costs Thus, Ec=100 output which is at all levels nothing but fixed of d hovor ТС 3570 TR Profit situation 210+ 2000 soot 1000+ . 500+ 10 15 20 25 30 35 40 Profit is maximised in compelline Industry where P=Mc=480 which is at 20 units Scanned by TapScanner