ECON 1 Lecture 21: ECON 1 11-10-2015

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brownyak123

6 Oct 2016

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Mc = cost / output = input * c (cost of input) / output = c / mp. Chapter 6 problem set firm production & cost question 2 a. Distance between atc and avc decrease: labor is input of production mc increase, avc increase, afc constant, atc increase d. (profit) = total revenue total cost. = p * q tfc tvc (q) = p * q afc * q avc * q. Chapter 6 problem set profit maximization question 1 a: 0 = p * q afc * q avc * q. Chapter 6 problem set profit maximization question 2. Chapter 6 problem set profit maximization question 3: mc = q2. Q* = 9: p* q* = 81* 9 = 729. Tc = atc * q = 27 * 9 = 243. = 729 243 = 486: marginal productivity will drop.

Related Questions

Production/Cost Exercises 1. The following is a short-run production table for a firm with labor as its only variable input. Wage = $ 310 Capital = 100 Capital Price= $20 Product Price= $65

Labor Output

0 0

1 50

2 110

3 160

4 200

5 230

6 250

7 260

8 265

9 260

10 250

A. Determine the following measures at all levels of output: MPL, APL, TFC, TVC, TC, TR, AVC, ATC, AFC, MC, PROFIT.

B. At what level of output is the profit maximized?

C. What kind of observations can you make about MC, price, average total cost, and profit?

ceruleanmosquito986

Each unit of input, X, costs $10. Fixed costs are $50, regardless of the level of output.

a.Complete the table below.

Labor, X	Total Output (TPP)	Marginal Physical Product (MPP)	TFC	TVC	TC	AFC	AVC	ATC	MC/unit
0	0
1	15
2	45
3	70
4	90
5	105
6	110
7	112

b.If the product can be sold for $0.75 per unit, what is the optimal level of output?

C. Find the level of profit at the optimal level of output. Explain what would happen if the firm produced one more unit of output in terms of marginal cost and marginal revenue.

Given following Price and Total Cost functions:

P = 120 - 7Q

TC = 40 + 70Q - 10Q² + 0.6Q³

Where P = price, and Q is output.

Fill in the table below and answer the questions below the table.

Q	P	FC	TVC	TC	TR	Profit
0
1
2
3
4
5
6
7
8
9
10

If your company's goal is to maximize profit, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum profit or minimum loss at the price and output you chose?

2. If your company's goal is to maximize total revenue, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum total revenue at the price and output you chose? (3 points)

Question 3

Given a firm with the following cost data, fill in the table below.

Q = OUTPUT TFC = Total Fixed Cost AVC = Average Variable Cost ATC = Average Total Cost TVC = Total Variable Cost MC = Marginal Cost TC = Total Cost

Q	FC	TVC	TC	AVC	ATC	MC
0				---	---	---
1						10
2
3				10		10
4

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ECON 1 Lecture 21: ECON 1 11-10-2015

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