Assignment
The following questions address some of the Price and Output decisions faced by firms other than those found 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
|
|
|
Questions:
1. Complete Table-1. Summarize your calculations or 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, what type of market structure could this be in the short run? Explain your answers.
6. If the data in Table-1 represents the long run, what type of firm must this data represent? Explain your answers.