Fill in the blanks below with the correct cost information.
Output TFC TVC TC AFC AVC ATC MC
0 ______
1 45.00 _____
2 40 ______
3 15.00 ______ 35
4 ______ 30
5 ______ 35
6 ______ 40
7 ______ 45
8 ______ 55
9 ______ 65
10 ______ 75
b. Assuming a purely competitive market, determine the optimal output and economic profit or loss for $55.
c. Answer the same questions as in part b. assuming a price of $32.
d. Answer the same questions as in part b. assuming a price of $45.
e. What output level does diminishing marginal returns begin to set in? How do you know this?
f. At what output level does Stage 2 of production begin?
Fill in the blanks below with the correct cost information.
Output TFC TVC TC AFC AVC ATC MC
0 ______
1 45.00 _____
2 40 ______
3 15.00 ______ 35
4 ______ 30
5 ______ 35
6 ______ 40
7 ______ 45
8 ______ 55
9 ______ 65
10 ______ 75
b. Assuming a purely competitive market, determine the optimal output and economic profit or loss for $55.
c. Answer the same questions as in part b. assuming a price of $32.
d. Answer the same questions as in part b. assuming a price of $45.
e. What output level does diminishing marginal returns begin to set in? How do you know this?
f. At what output level does Stage 2 of production begin?
Related textbook solutions
Related questions
A. Fill in the formula for AFC, AVC, ATC, and MC at the top of the column in the gray section within the table. B. Fill in the missing values for TFC, TVC, AFC, AVC, ATC, and MC in the blue sections of the table.
|
Output |
Total Fixed Cost |
Total Variable Cost |
Total Cost |
Average Fixed Cost |
Average Variable Cost |
Average Total Cost |
Marginal Cost |
|
0 |
|
|
$600 |
|
|
|
|
|
5 |
|
|
900 |
|
|
|
|
|
10 |
|
|
1,150 |
|
|
|
|
|
15 |
|
|
1,350 |
|
|
|
|
|
20 |
|
|
1,600 |
|
|
|
|
|
25 |
|
|
1,900 |
|
|
|
|
|
30 |
|
|
2,275 |
|
|
|
|
|
35 |
|
|
2,725 |
|
|
|
|
|
40 |
|
|
3,375 |
|
|
|
|
|
45 |
|
|
4,225 |
|
|
|
|
|
50 |
|
|
5,325 |
|
|
|
|
C. Identify the efficient scale of the firm. Explain your reasoning.
Part II. Consider the values in the following table for the Winsome Widget Factory
|
Winsome Widget Factory |
|
|
Output |
Long-Run Average Total Cost |
|
0 |
------------------ |
|
5 |
170 |
|
10 |
110 |
|
15 |
85 |
|
20 |
83 |
|
25 |
78 |
|
30 |
75 |
|
35 |
75 |
|
40 |
80 |
|
45 |
82 |
|
50 |
97 |
a. Over what output levels do the economics of scale occur? Explain.
b. Over what output levels do constant returns to scale occur? Explain.
c. Over what output levels do diseconomies of scale occur? Explain.
Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget.
| Output | Total Cost |
| 0 | 100 |
| 10 | 150 |
| 20 | 180 |
| 30 | 200 |
| 40 | 240 |
| 50 | 300 |
| 60 | 375 |
| 70 | 475 |
| 80 | 600 |
| 90 | 750 |
| 100 | 1,000 |
a. Fill in the formula for AFC, AVC, ATC, MC, TR, MR, and Total Profit.
b. Fill in the missing values for TFC, TVC, AFC, AVC, ATC, MC, TR, MR, and Total Profit.
