Description
For this assignment you will do a significant portion of work in MS Excel and import it into an MS Word document for submission. You will use the data below to address Price and Output decisions faced by firms that are not in pure competition. Some numbers may be rounded.
Table 1 | |||||||
Output | Average Fixed cost | Average Variable Cost | Average Total Cost | Marginal Cost | Price | Total Revenue | Marginal Revenue |
0 | $ 345.00 | ||||||
1 | $ 180.00 | $ 135.00 | $ 315.00 | $ 300.00 | |||
2 | $ 90.00 | $ 127.50 | $ 217.50 | $ 249.00 | |||
3 | $ 60.00 | $ 120.00 | $ 180.00 | $ 213.00 | |||
4 | $ 45.00 | $ 112.50 | $ 157.50 | $ 189.00 | |||
5 | $ 36.00 | $ 111.00 | $ 147.00 | $ 165.00 | |||
6 | $ 30.00 | $ 112.50 | $ 142.50 | $ 144.00 | |||
7 | $ 25.71 | $ 115.70 | $ 141.41 | $ 126.00 | |||
8 | $ 22.50 | $ 121.90 | $ 144.40 | $ 111.00 | |||
9 | $ 20.00 | $ 130.00 | $ 150.00 | $ 99.00 | |||
10 | $ 18.00 | $ 139.50 | $ 157.50 | $ 87.00 |
Address the following:
- Complete Table-1. Summarize your calculations.
- Prepare a graph showing:
- Average Fixed Costs
- Average Variable Costs
- Average Total Costs
- Marginal Revenue
- Marginal Costs
- Using the data in the table and on your graph, explain the profit maximizing, or loss minimizing level of output.
- Define a normal profit and an economic profit. Are normal profits being earned in this example? Are economic profits present for this firm in this example? Explain your answers.
- Given the data in the table and the graph, what type of market structurecould this be in the short run? Explain your answers.
- If the data in Table-1 represents the long run, what type of firm must this data represent? Explain your answers.
Explanation & Answer
HiPlease check the attached files for the work, let me know if youhave any questions, thank you. James,
The following questions address some of the price and output decisions faced by firms other than
those found in perfect competition. Some numbers may be rounded.
Table 1
Output
0
1
2
3
4
5
6
7
8
9
10
Average
Fixed cost
$ 180.00
$ 90.00
$ 60.00
$ 45.00
$ 36.00
$ 30.00
$ 25.71
$ 22.50
$ 20.00
$ 18.00
Average
Variable Average Total Marginal
Cost
Cost
Cost
$ 135.00
$ 127.50
$ 120.00
$ 112.50
$ 111.00
$ 112.50
$ 115.70
$ 121.90
$ 130.00
$ 139.50
$
$
$
$
$
$
$
$
$
$
315.00
217.50
180.00
157.50
147.00
142.50
141.41
144.40
150.00
157.50
Total Marginal
Price Revenue Revenue
$ 345.00
$ 300.00
$ 249.00
$ 213.00
$ 189.00
$ 165.00
$ 144.00
$ 126.00
$ 111.00
$ 99.00
$ 87.00
Questions:
1. Complete Table 1. Summarize your calculations and use Microsoft Excel.
2. Using Excel, draw one graph showing average fixed costs, average variable costs,
average total costs, marginal revenue, and marginal costs.
3. Using the data in the table and on your graph, what is the profit maximizing, or loss
minimizing level of output? Explain and justify your answers.
4. What is a normal profit? What is an economic profit? Explain your answer using
examples. Are normal profits being earned in this example? Are economic profits present
for this firm in this example? Explain your answers.
5. Given the data in the table and the graph, how could you determine or identify the
optimal plant size?
6. What is the difference between explicit and implicit cost? Explain your answers.
7. How would we determine if a cost is a fixed cost or a variable cost?
1.
Average...