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.
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Table 1
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Output
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Average Fixed cost
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Average Variable Cost
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Average Total Cost
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Marginal Cost
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Price
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Total Revenue
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Marginal Revenue
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0
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$ 345.00
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1
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$ 180.00
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$ 135.00
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$ 315.00
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$ 300.00
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2
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$ 90.00
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$ 127.50
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$ 217.50
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$ 249.00
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3
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$ 60.00
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$ 120.00
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$ 180.00
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$ 213.00
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4
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$ 45.00
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$ 112.50
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$ 157.50
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$ 189.00
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5
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$ 36.00
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$ 111.00
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$ 147.00
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$ 165.00
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6
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$ 30.00
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$ 112.50
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$ 142.50
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$ 144.00
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7
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$ 25.71
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$ 115.70
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$ 141.41
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$ 126.00
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8
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$ 22.50
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$ 121.90
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$ 144.40
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$ 111.00
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9
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$ 20.00
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$ 130.00
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$ 150.00
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$ 99.00
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10
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$ 18.00
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$ 139.50
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$ 157.50
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$ 87.00
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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 structure could 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.