What is wrong with the below calculations? What is the correct ATC and what is t

Question

What is wrong with the below calculations? What is the correct ATC and what is the correct AVC

Total Cost (TC) = 160,000,000 + 100Q + 0.0063212Q2 Variable Cost (VC) = 100Q + 0.0063212Q2 Marginal Cost (MC) = 100 + 0.0126424Q Average Total Cost (ATC) = 160,000,000/Q +100 +0.0063212Q In the long run, a firm reaches equilibrium when ATC = MC 160,000,000/Q +100 +0.0063212Q = 100 + 0.0126424Q 160,000,000/Q +0.0063212Q = 0.0126424Q dividing both sides by Q= 160,000,000/Q2 +0.0063212 = 0.0126424 160,000,000/Q2 = 0.0126424 - 0.0063212 160,000,000/Q2 = 0.0063212 Q2 = 160,000,000/ 0.0063212 Long-term equilibrium= Q= 159,096.35 Break even point quantity When the company produces Q=159,096.35 the firm reaches economy of scale and is able to minimize the ATC. Beyond this point diseconomies sets in and ATC increases. AVC = VC/Q +100 + 0.0063212Q The firm will recover all its fixed costs when ATC = AVC. Solving using ATC= 160,000,000/159,096.353+100+.00632212*159,096.353 Breakeven point price= 2,111.51 (above in cents) If the price were to go lower than $21.12 the company would not be able to cover their TFC = shut down. Calculating Shut Down Point: profit ()= TR-TC TR= P*Q TC= TFC-TVC TVC= AVC*Q Shut Down Point: = (P*Q) -TFC - (AVC*Q) Demand equation: Qi= 350,000 - 100P Inverse Demand Equation: P= 3,500 - 0.01Q TR= P*Q (3,500 - 0.01Q)*Q 3,500Q - 0.01Q2 MR= 3,500 - 0.02Q maximizing profits outputs: MR= MC 3,500 - 0.02Q= 100 + 0.0126424 Q= 104,159.01 Profits are maximized with output of 104,159.01 units. maximizing profits price: Now solve for P, using the Q calculated above. P= 3,500 - 0.01 (104159.008) P= 2,458.41 (in cents) Profits are maximized with a price of $24.58.   AVC= VC/Q +100 + 0.0063212Q 160,000,000/104159.008 + 100 + 0.0063212 (104159.008) 2,294.52 AVC= $22.95 TR= P*Q 2458.410*104159.008 256,065,546.86 TC= ATC*Q 2294.523*104159.008 238,995,239.51 Profitablility = TR-TC 256065546.86-238995239.51 in cents 17,070,307.35 $170,703.07

Explanation / Answer

There is nothing wrong in calculations but you have to check the values entered with your given data and in the table are same or differ

If any difference in small point value ATC changes a lot and effects other values too

Cross check all the values enteted

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