Problems to Practice for the Final Exams with the Solutions Problem 1 Answer the

Question

Problems to Practice for the Final Exams with the Solutions Problem 1 Answer the following: I. What is the price that the m charges? (P=10) 2. What is the break-even output? (Q-5, 13) 3. What is the profit maximizing output? (0-10) . What is maximum profit? (Tmax-TR-TC-100-70-30 5. What is the fixed cost? (TFC-30) 6. What are the AC, AVC, and AFC at the profit maximizing output? AC=TC/Q = 70/10: 7, ARePs10. AFC-TFC/Q:30/10-3, AVC-AC-AFC-7-3-4 7. What are the AC, AVC, and AFC at break-even output Q 5? At Q,#5, AR-AC-10, AFC-FC/Q = 30/5-6. Therefore, AVCAC-AFC=10-6-4 8, what are the AC, AVC, and AFC at break-even output Q13? At Q-13, AR-AC-10, AFC FCIQ-30/13-2.3. Therefore, AVC AC-AFC-10-2.3-Z.Z If the markat prico is 7, answor the following: 1. What is the output where the firm maximizes its profts? (Q-1200) 2. what are the total maximum profits? ((max)=(PACla-(7-5.25)"120-1791 200-2100) 3. What is the total cost at the profit maximization output? (TC AC - 5.25*1200 6300) 4. What is the total revenue at the profit maximization output? (P"Q = 7"1200-8400) 5. What is the break-even output? (Q= 500, 1500) 6, what is the minimum price that wil alow the firm to stay in business in the long-run? (P(min)-5) 7. What is the total profit and total cost when tho firm produces 1400 units? (TTm(PACXQ = (7-6r1400- Problem4 Problom 2 If tho prico is d4, identify the rectanglos that roprosant the following: 1. Total maximum profcs: (HINR) 2. Total fxed costs at the profit maximization output: (FHRK) 3. Total variable costs at the profit maimization output: (OFKD) 4. Total costs at the profit maximization output: (OHRD) 5. Total revenues at the profit maximization output: (OIND) Answer the folowing 1. How many units this firm should produce in order to maximizes its profits? (Q-30,000) 2. What are the total maximum profits? TT-(PAsia-(-60..55)"30,000 = (.05)"30,000 s 1500 3. What is the total cost at the profit maximization output? TC=AC"Q = "55"30,000 = $16,500 4, what is the total rovenua at the profit maximization output? TRtP'Q = .60"30,000-$18,000 5. What is the break-even output? Q(e)-20,40 6. What is the total profit and total cost when the firm produces 25,000 units? TT (P AGIQ- (.65 60)25,000-.05 25,000-1250 (approximatoly) 7, What is the most efficient (lowest AC) level of output? Q-40

Explanation / Answer

1) difference between TR and TC is profit which should be maximum. Thus P=100 because TR=100 and Q=10

B)breakeven means zero profit. Thus TR=TC so Q=5 and 13.

C)Q=10 because TR-TC is maximum

D)profit=TR-TC=100-70=30

E)TFC=30 because at Q=0, TC=TFC which cant be changed in short run

F)AC=TC/Q=70/10=7. AFC=TFC/Q=30/10=3 and AVC=TVC/Q=40/10=4

G)At Q=5. Tc=50 thus AC=50/5. Afc=TFC/Q=30/5 and avc=TVC/Q=20/5=4

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.