Calculate average total cost, Business Economics

Calculate Average Total Cost

A perfectly Competitive firm is operating at a profit-maximizing level of output, q*. This output level is 500 units.

At this output level, the firm earns a Total Revenue of $3,000. At this output, the firm faces the following costs:

  Total Fixed Costs of $1,200

  Total Variable Costs of  $3,300 and   

(A) Solve for the Market Price. PE

 = ___

(B)  Solve for ATC (average total cost) at an output level of 1,000 units.  

ATC= _

(C) Calculate the firm's profit. (Specify if this is positive or negative profit.)  

Profit = _____

(D) Should the firm shut down or keep producing in the Short Run? 

(E) Graph this, for the firm; indicate the demand curve the firm faces. Also indicate the MC, ATC, and AVC curves. Label q* on the quantity axis. Indicate the value of the ATC & AVC curves (and PE) at the level of output q*. (Label these values on the Price Axis. )

Draw in the Profit Box as well.  

1803_Calculate Average Total Cost.png

Posted Date: 2/14/2013 7:49:16 AM | Location : United States







Related Discussions:- Calculate average total cost, Assignment Help, Ask Question on Calculate average total cost, Get Answer, Expert's Help, Calculate average total cost Discussions

Write discussion on Calculate average total cost
Your posts are moderated
Related Questions
How is supply related to opportunity cost?

What is meant by the term the triple constraint? What are the three elements of the triple constraint and why is an understanding of their relative weight significant in exercising

as a result of 2008 financial crisis, there was loss of construction jobs in us, since home developers stopped building new homes. in your opinion which type of unemplyment is res

What is Foreign Debt Management? Debt management considers as to the arrangements made to: • Protected the suitable amount of borrowing to deliver growth • Ignore excess

Consider the following model: Y*i= β 0 X t β 1e U t a)  Using the stock adjustment model, estimate the short-run and long-run elasticities b) Comment on the following pr

How do currency speculators harm for Less Developed Countries? Private capital inflows can be short term and speculative. Speculators shift funds in a Less Developed Countries


Can comparative benefit change over time? Comparative benefit is a dynamic concept. A country can obtain or lose comparative advantage overtime when there is a change within r

Assess the impact of fiscal and monetory policy on business organisations and their activities

Is the Washington Consensus actually a consensus? The Washington agreement thinking dominates development thinking in the developed world but is challenged through less develo