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Economics

# Economics - Solution Computation of the firm output level...

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If you want the formulas and any calculations, select the corresponding cell and press F2( It will show all calculations and formulas Automatically Question: Solution: Computation of the Following Fixed Vairable Total Output Cost AFC Cost AVC Cost ATC 1 \$50 \$50 \$30 \$30 \$80 \$80 2 \$50 \$25 \$50 \$25 \$100 \$50 3 \$50 \$17 \$80 \$27 \$130 \$43 4 \$50 \$13 \$120 \$30 \$170 \$43 5 \$50 \$10 \$170 \$34 \$220 \$44 Question: The firm is selling in a perfectly competitive market. What is the shutdown price? Solution: Computation of the Shutdown Price The Avg Fixed Cost and Variable cost are equal at 25 and the shutdown price is \$25 At a price of \$40, what output level would the firm produce?

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Unformatted text preview: Solution: Computation of the firm output level Where the marginal cost is 40 on that level out put is 4 Units Hence the output is 4 units What would its profits be? Solution: Computation of the Profit or loss Given information output level 4 Units Price 40 Per unit Variable cost 30 Per unit Fixed cost 50 In total Profit or loss= Total revenue-Variable cost -Fixed cost Where as Total Revenue \$160.00 Variable cost \$120.00 Fixed cost \$50.00 Profit or loss= \$(10.00) Hence the Profit or loss is \$(10.00) (Function Key on key board), MC \$30 \$20 \$30 \$40 \$50...
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