e table below describes the costs faced by a firm Quantity Marginal Cost Total c
ID: 1124798 • Letter: E
Question
e table below describes the costs faced by a firm Quantity Marginal Cost Total cost ATC 0 AVC $43 12 10 12 15 18 2 l 2 325 25 .67 1,33 2.25 9,4 9. 8 229 20,8 92 23 5 6 132 15 27 1. . How much is the fixed cost? Why? 42QQ ; because cost incured ashen ouptut is 2. If the market price of each camera case is $22, what is the profit-maximization quantity? Co units 3. How much is the variable cost at the optimum level of output? Gunits vanoble cost 4. Will the firm stay in the industry? Why? rods are Ø 5. Determine the maximum profit $0729Explanation / Answer
1) The fixed cost is $ 43 because even when there is no output, the firm incurs a fixed cost of $ 43
2) The profit maximizing quantity is 7 units as seen from the table above.
3) The variable cost at the optimum level of output equals $ 116
4) The firm will stay in the industry because the profits are positive.
Quantity Marginal cost Total cost ATC AVC variable cost Revenue Profit 0 43 0 0 0 0 1 12 55 55 12 12 22 -33 2 10 65 32.5 11 22 44 11.5 3 12 77 25.66667 11.33333 34 66 40.33333333 4 15 92 23 12.25 49 88 65 5 18 110 22 13.4 67 110 88 6 22 132 22 14.83333 89 132 110 7 27 159 22.71429 16.57143 116 154 131.2857143Related Questions
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