ME12CASE10 - Table10.1 Competitive Firm Profits Are...

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Unformatted text preview: Table10.1 Competitive Firm Profits Are Maximized When Marginal Revenue Equals Marginal Cost Units Price Total Revenue Fixed Cost Variable Costs Total Cost Marginal Cost (1) (2) (3) = (1) x (2) (3) (4) (5) = (4)/(1) (6) = (3) + (4) (7) = (6)/(1) (8) = (3) - (6) (9) = ∂TR/∂Q (10) = ∂TC/∂Q (11) = (9) - (10) 25 311,250 50,000 361,250-361,250 25 5 20 5,000 25 125,000 311,250 80,000 16.00 391,250 78.25-266,250 25 7 18 10,000 25 250,000 311,250 120,000 12.00 431,250 43.13-181,250 25 9 16 15,000 25 375,000 311,250 170,000 11.33 481,250 32.08-106,250 25 11 14 20,000 25 500,000 311,250 230,000 11.50 541,250 27.06-41,250 25 13 12 25,000 25 625,000 311,250 300,000 12.00 611,250 24.45 13,750 25 15 10 30,000 25 750,000 311,250 380,000 12.67 691,250 23.04 58,750 25 17 8 35,000 25 875,000 311,250 470,000 13.43 781,250 22.32 93,750 25 19 6 40,000 25 1,000,000 311,250 570,000 14.25 881,250 22.03 118,750 25 21 4 45,000 25 1,125,000 311,250 680,000 15.11 991,250 22.03 133,750 25 23 2 50,000 25 1,250,000 311,250 800,000 16.00 1,111,250 22.23 138,750 25 25 55,000 25 1,375,000 311,250 930,000 16.91 1,241,250 22.57 133,750 25 27-2 60,000 25 1,500,000 311,250 1,070,000 17.83 1,381,250 23.02 118,750 25 29-4 65,000 25 1,625,000 311,250 1,220,000 18.77 1,531,250 23.56 93,750 25 31-6 70,000 25 1,750,000 311,250 1,380,000 19.71 1,691,250 24.16 58,750 25 33-8 75,000 25 1,875,000 311,250 1,550,000 20.67 1,861,250 24.82 13,750 25 35-10 80,000 25 2,000,000 311,250 1,730,000 21.63 2,041,250 25.52-41,250 25 37-12 Average Variable Cost Average Total Cost Total Profit (TR-TC) Marginal Revenue Marginal Profit (MR-MC) $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 Figure 10.1 Total Revenue, Total Cost and Profits Column C Column G Dollars 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 Units $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 e 10.2 Competitive Firm Profits Are Maximized When Marginal Revenue Equals Margina Dollars Per Unit 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 $0 Units $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 Figure 10.3 Competitive Firm Supply Curve a. The short-run firm supply curve follows MC Curve if MC > AVC Dollars Per Unit 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 $0 Units Supply Curve Marginal Cost 5 5,000 7 10,000 9 15,000 11 11 20,000 13 13 25,000 15 15 30,000 17 17 35,000 19 19 40,000 21 21 45,000 23 23 50,000 25 25 55,000 27 27 60,000 29 29 65,000 31 31 70,000 33 33 75,000 35 35 80,000 37 37 + 2,500P $10 $20 $30 $40 $50 $60 $70 $80 $90 b. The long-run firm supply curve follows MC Curve if MC > ATC Dollars Per Unit 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 70,000 75,000 80,000 $0 Units Supply CurMarginal Cost 5 5,000 7 10,000 9 15,000 11 20,000 13 25,000 15 30,000 17 35,000 19 40,000 21 21 45,000 23 23 50,000 25 25 55,000 27 27 60,000 29 29 65,000 31 31 70,000 33 33 75,000 35 35 80,000 37 37 $5...
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ME12CASE10 - Table10.1 Competitive Firm Profits Are...

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