ECON 120W Lecture Notes - Lecture 8: Diminishing Returns
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25 Sep 2020
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Using Table 1 as your reference, what is the firm's optimal production decision. That is, at what production level (QF) does the firm make the largest short-run profit? If FC increased by 5000 what does that do the optimal production and if MC increase by 50 what does that do? This is a monopoly.
P | Q | FC | VC | TC | AFC | AVC | ATC | MC | TR | MR | TProfit |
600 | 0 | 40000 | 0 | 40000 | 0 | -40000 | |||||
550 | 50 | 40000 | 21000 | 61000 | 800 | 420 | 1220 | 420 | 27500 | 550 | -33500 |
500 | 100 | 40000 | 30500 | 70500 | 400 | 305 | 705 | 190 | 50000 | 450 | -20500 |
450 | 150 | 40000 | 39800 | 79800 | 267 | 265 | 532 | 186 | 67500 | 350 | -12300 |
400 | 200 | 40000 | 42100 | 82100 | 200 | 211 | 411 | 46 | 80000 | 250 | -2100 |
350 | 250 | 40000 | 44900 | 84900 | 160 | 180 | 340 | 56 | 87500 | 150 | 2600 |
300 | 300 | 40000 | 52000 | 92000 | 133 | 173 | 307 | 142 | 90000 | 50 | -2000 |
250 | 350 | 40000 | 68000 | 108000 | 114 | 194 | 309 | 320 | 87500 | -50 | -20500 |
200 | 400 | 40000 | 94000 | 134000 | 100 | 235 | 335 | 520 | 80000 | -150 | -54000 |
150 | 450 | 40000 | 128000 | 168000 | 89 | 284 | 373 | 680 | 67500 | -250 | -100500 |