Assume your business sells its products in a Perfectly Competitive Market. Let’s
ID: 1137865 • Letter: A
Question
Assume your business sells its products in a Perfectly Competitive Market. Let’s say that fixed costs (FC) are $50.
Q Labor
Q Output
FC
VC
TC
MC
AFC
AVC
ATC
0
0
50
$0.00
50
1
20
50
$35.00
85
1.750
2.500
1.750
4.250
2
60
50
$75.00
125
1.000
0.833
1.250
2.083
3
150
50
$110.00
160
0.389
0.333
0.733
1.067
4
260
50
$140.00
190
0.273
0.192
0.538
0.731
5
350
50
$175.00
225
0.389
0.143
0.500
0.643
6
420
50
$215.00
265
0.571
0.119
0.512
0.631
7
455
50
$260.00
310
1.286
0.110
0.571
0.681
8
420
50
$315.00
365
-1.571
0.119
0.750
0.869
9
375
50
$390.00
440
-1.667
0.133
1.040
1.173
10
300
50
$500.00
550
-1.467
0.167
1.667
1.833
Use the Graph to determine at what output level MC and AVC are approximately equal?
HINT: Focus on the output level where MC crosses the line from below.
Answer: Q Output =
Use the Graph to determine at what output level are MC and ATC approximately equal?
HINT: Focus on the output level where MC crosses the line from beneath.
Answer: Q Output =
Use the Table to determine at what output level average total cost is the lowest. If there are two quantities, choose the larger Q Output.
Answer: Q Output = __________ and cost $=
Q Labor
Q Output
FC
VC
TC
MC
AFC
AVC
ATC
0
0
50
$0.00
50
1
20
50
$35.00
85
1.750
2.500
1.750
4.250
2
60
50
$75.00
125
1.000
0.833
1.250
2.083
3
150
50
$110.00
160
0.389
0.333
0.733
1.067
4
260
50
$140.00
190
0.273
0.192
0.538
0.731
5
350
50
$175.00
225
0.389
0.143
0.500
0.643
6
420
50
$215.00
265
0.571
0.119
0.512
0.631
7
455
50
$260.00
310
1.286
0.110
0.571
0.681
8
420
50
$315.00
365
-1.571
0.119
0.750
0.869
9
375
50
$390.00
440
-1.667
0.133
1.040
1.173
10
300
50
$500.00
550
-1.467
0.167
1.667
1.833
Explanation / Answer
at output level 20, MC and AVC are approximate equal.
at output level 420, MC and ATC are approximate equal
at output level 420, average total cost is the lowest.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.