Identify the key economic concepts influencing production

Reference no: EM13799388

Case ?Define costs of different types and their relationship to profits.

Identify the key economic concepts influencing production.

Understand the characteristics of a perfectly competitive firm.

Discussion Identify the key economic concepts influencing production.

1.The following table gives short-run and long-run total costs for various levels of output for a perfectly competitive firm:

Output (Q)	SRTC	AVC	TR
0	350
1	400
2	425
3	465
4	505
5	560
6	635
7	730

Note: AVC is Average Variable Cost

TR is Total Revenue

SRTC is Short Run Total Cost

SRTC = FC + VC (Total Cost = Fixed Cost + Variable Costs)

Please see background material for additional formulas.

a. Suppose the fixed cost (FC) of production is $350 and Price (P) is $55, complete the table above. (Cut and paste the table into a separate document).

b. Suppose you are producing 2 units of output (Q = 2), if you want to produce one extra unit of output (Q = 3), what would be the marginal cost?

c. If the market price is given as $55, how much output will the perfectly competitive firm produce to maximize profits?

d. Calculate the profit or loss.

e. Should the firm always shut down in the short run when it experiences a loss? Explain.

Reference no: EM13799388

Questions Cloud

Explain the relationship between motivation and behavior : Explain the relationship between motivation and behavior

Apply the concepts of buoyancy and archimedes principle : To apply the concepts of buoyancy and Archimedes' Principle. To practice the use of free-body diagrams and the application of Newton's 2nd Law

Explain resource pricing why is it important : Explicit vs Implict? explain difference and Explain Resource Pricing why is it important?

Common techniques used by astronomers : Describe four of the most common techniques used by astronomers to determine distances to stars and galaxies. Make sure you include the scientific theory behind each method and the range over which each method is considered valid.

Identify the key economic concepts influencing production : Identify the key economic concepts influencing production - Understand the characteristics of a perfectly competitive firm.

Christological models of the new testament church : Explain the differences between the various Christological models of the New Testament Church.

Contrast wuthering heights and thrushcross grange : What role does social class play in this contrast? Does nature and the landscape play any role in this difference?

Write a paper about assimilation how have i assimilated : Write a paper about Assimilation: How have I assimilated?. to new culture due to globalaization (one paragraph) and about being international student.

Organizational culture and ethical conduct : Determine the overall satisfaction of employees with the management on leading the organization in an ethical manner.

User Account

All Pages