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Homework answers / question archive / For next five problems, you'll be filling in the blanks

For next five problems, you'll be filling in the blanks

Economics

For next five problems, you'll be filling in the blanks. Enter numbers only and do NOT enter in dollar signs. 
Keep in mind that you might have to enter in a negative number. To do this, you will have to enter in a minus sign (-) in front of the number. 
Quantity TFC TVC 
0 45 0 1 45 20 2 45 35 3 45 45 4 45 75 5 45 120 6 45 180 

Examine the table above, which gives information about the costs of a perfectly competitive firm. You are hired to determine the profit-maximizing quantity for the firm at different prices. For each price listed, you must find the output level, total revenue, total cost, and profit.

 

When the market price is P = $14,

 

What is the profit maximizing level of output?  

What is total revenue at this level of output?  

What is the total cost at this level of output?  

What is the profit at this level of output?  

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Quantity TFC TVC TC MC Price TR
0 45 0 45 - $14  $0 
1 45 20 65 20 $14  $14 
2 45 35 80 15 $14  $28 
3 45 45 90 10 $14  $42 
4 45 75 120 30 $14  $56 
5 45 120 165 45 $14  $70 
6 45 180 225 60 $14  $84 

Here at any quantity, MR is not equal to MC so the firm will produce a quantity where MR is greater than Mc before MR starts less than MC. here at Quantity 3, MR is greater than MC and at Quantity 4 MR is less than MC. so the firm will produce 3 quantity.

 

The profit-maximizing level of output is 3.

The total revenue at this level of output is 42.

The total cost at this level of output is 90.

The profit at this level of output:

Profit = Total Revenue - Total Cost

= $42 - $90

Profit = -48

 

Workings:

Total Cost (TC) = TFC + TVC

Marginal Cost (MC) = Change in Total Cost/Change in Total Quantity

Total Revenue (TR) = Price * Qunatity

 

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