Market forms final 1.docx - Running Head THEORY OF...

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Running Head: THEORY OF PRODUCTION: MARKET FORMS 1 Theory of Production: Market Forms Name: Institution: Subject: Date:
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THEORY OF PRODUCTION: MARKET FORMS 2 Theory of Production: Market Forms Table 1 Output Average Fixed cost Average Variable Cost Average Total Cost Marginal Cost Price Total Revenue Marginal Revenue 0 $0 $0 $0 0 $ 345.00 $0 0 1 $ 180.00 $ 135.00 $ 315.00 0 $ 300.00 $300 0 2 $ 90.00 $ 127.50 $ 217.50 98 $ 249.00 $498 198 3 $ 60.00 $ 120.00 $ 180.00 37 $ 213.00 $639 144 4 $ 45.00 $ 112.50 $ 157.50 23 $ 189.00 $756 117 5 $ 36.00 $ 111.00 $ 147.00 10 $ 165.00 $825 69 6 $ 30.00 $ 112.50 $ 142.50 4.5 $ 144.00 $864 39 7 $ 25.71 $ 115.70 $ 141.41 1.09 $ 126.00 $882 18 8 $ 22.50 $ 121.90 $ 144.40 -2.99 $ 111.00 $888 6 9 $ 20.00 $ 130.00 $ 150.00 -5.6 $ 99.00 $891 3 10 $ 18.00 $ 139.50 $ 157.50 -7.5 $ 87.00 $870 -21 Summary of Calculations Calculation of marginal cost is obtained by dividing the change in total cost by change in output. In this case it’s determined by differences in ATC. The calculation of total revenue is obtained by multiplying price at every unit level and quantity produced or the output. Marginal revenue is obtained by dividing the change in revenue by the change in output (Sealey & Lindley, 1977) . Graph 1: AFC, AVC, ATC, MC, MR per Output
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THEORY OF PRODUCTION: MARKET FORMS 3 0 1 2 3 4 5 6 7 8 9 10 -50 0 50 100 150 200 250 300 350 Output Average Fixed cost
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