Question

The next series of questions uses the following table. The table contains 5 columns: Quantity Q, Price P, Total Revenue TR, Total Cost TC, and Total Profit. You are given the numbers for the 1st, 2nd, and 4th columns and must find the numbers for the 3rd column (Total Revenue) and the 5th column (Total Profit). I suggest completely filling out the table on a piece of paper. First, calculate total revenue at a quantity of 2.

Quantity Q	Price P	Total Revenue TR	Total Cost TC	Total Profit
0	$200		$20
1	$180		$110
2	$160		$140
3	$140		$160
4	$120		$190
5	$100		$230
6	$80		$270
7	$60		$330

Using the previous table, can you determine if this is the short run or long run? Explain.

Long run since there are no fixed costs.

Short run since there are fixed costs

Short run since there are positive profits

Cannot be determined.

Answer 1

Total revenue = Price * Q

Total profit = Total revenue - Total cost

Quantity Q	Price P	Total Revenue TR	Total Cost TC	Total Profit
0	200	0	20	-20
1	180	180	110	70
2	160	320	140	180
3	140	420	160	260
4	120	480	190	290
5	100	500	230	270
6	80	480	270	210
7	60	420	330	90

Short run since there are fixed costs

In the short run, there are both fixed and variable costs. In the long run, there are no fixed costs. At output = 0, the cost is 20, which is a fixed cost. therefore it's a short run