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week 3 assignment 2 econ.docx

Assignment 2: LASA 1: The Costs of Production
A small firm in the agricultural industry, Joseph Farms, Inc., has researched limited data for their
firm. They are asking you to help them complete the information below so they will be able to
make decisions based on the data.
1. Complete Table-1 (Joseph Farms, Inc., Cost and Revenue Data), either as a Microsoft
Excel spreadsheet, or as a Microsoft Word table. Assume that the price is $165 and the
fixed costs are $125, at an output level of 1. Also assume that the data represents a firm in
pure competition. Show your calculations in summary form.
2. What is the MC=MR Rule? To what market structures does this Rule apply? Explain
your answers.
3. Using Microsoft Excel, graph the data in Columns 9 and 10.
4. What is the profit maximizing (or loss minimizing) output for this firm? Is there an
economic profit? Explain your answers.
5. Explain why a firm in pure competition is considered to be a price taker.
6. Using the data in Table-1 (Joseph Farms, Inc., Cost and Revenue Data), complete Table-2
(Joseph Farms, Inc., Revenue/Profit/Loss Data), either as a Microsoft Excel spreadsheet,
or as a Microsoft Word table. Show your calculations in summary form.
7. Using the data in Table-2 (Joseph Farms, Inc., Revenue/Profit/Loss Data), what is the
break even output level for this firm? If this firm is in pure competition, at what output
level would they operate? Show your calculations in summary form.
Table-1: Joseph Farms, Inc., Cost and Revenue Data
Column Column Column Column 4 Column Column 6 Column 7 Column 8 Column Column Column 11
1
2
3
5
9
10
Output Price Total Total
Total Average Average Average
Marginal Marginal Total
Level per unit Fixed Variable
Cost
Fixed Cost Variable Total Cost Cost
Revenue Revenue
Cost
Cost
Cost
0
$
NA
1
$ 113.00
2
$ 213.00
3
$ 300.00
4
$ 375.00
5
$ 463.00
6
$ 563.00
7
$ 675.00
8
$ 813.00
9
$ 975.00
10
$ 1,163.00
Table-2: Joseph Farms, Inc., Revenue/Profit/Loss Data
Output
Level

Price

Total
Revenue

Profit or
Loss

0
1
2
3
4
5
6
7
8
9
10

By Wednesday, September 18, 2013, create a Microsoft Word document to collate your
answers, and submit it to the M3: Assignment 2 Dropbox. Note: You cannot submit an Excel
spreadsheet for this assignment. The assignment calls for the use of tables and charts. Prepare
those in an Excel spreadsheet, then copy and paste them into your Word document for
submission.
Assignment 2 Grading Criteria

Accurately calculated cost data (total fixed, total, average
fixed, average variable, average total, and marginal) and
revenue data (marginal and total) for output level ranging from
1 to 10 in Table-1. Showed calculations in summary form.
Correctly assumed data represented a firm in pure competition.
(40 points)
Completed Table-1 as Microsoft Excel spreadsheet or Word
table. (8 points)
Explained the MC=MR Rule. (12 points)

Maximum
Points

48

32

Identified market structures the MC=MR Rule applies to. (8
points)
Explained why MC=MR Rule applies to these market
structures. (12 points)
Graphed all the data in column 9 of Table-1 (marginal cost) as
curves in Microsoft Excel. (8 points)
Graphed all the data in column 10 of Table-1 (marginal
revenue) as curves in Microsoft Excel. (8 points)
Explained the profit maximizing (or loss minimizing) output
for Josephs Farms, Inc. (14 points)
Explained whether or not there is an economic profit for
Josephs Farms, Inc. (14 points)
Explained why a firm in pure competition is considered to be a
price taker.
Accurately calculated price, total revenue, and profit or loss
data for output level ranging from 0 to 10 in Table-2 using data
from Table-1. Showed calculations in summary form. (10
points)
Completed Table-2 as Microsoft Excel spreadsheet or Word
table. (2 points)
Accurately calculated the break-even output level (break-even
point) for Josephs Farms, Inc. using data in Table-2. Showed
calculations in summary form. (8 points)
Explained what the firms operating output level would be
given it is a purely competitive firm.( 8 points)
Style (4 points): Tone, audience, and word choice.
Usage and Mechanics (4 points): Grammar, spelling, and
sentence structure.

16

28
28

12

16

20

APA Elements (12 points): In text citations and references,
paraphrasing, and appropriate use of quotations and other
elements of style.
Total:

200

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week 3 assignment 2 econ.docx

Assignment 2: LASA 1: The Costs of Production
A small firm in the agricultural industry, Joseph Farms, Inc., has researched limited data for their
firm. They are asking you to help them complete...

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