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
Explain the essential distinction among the stages of growth theory of development, the theory of international-dependence in both its neo-marxist and false paradigm conceptualizat

Is industrialisation significant in the process of development? Industrialisation is considered as a major driver of LDC development. Industrialisation arises while a predomin

What are the reasons for globalisation? Globalisation is the result of: • Enhancements in communications and transport, • Elimination of trade limits and exchange contro

What is a firm

Distribution of benefits for transferring drivers to transit during a congested morning commute A residential suburb has N = 30,000 commuters who drive alone to jobs in a cen

Hatfield owned a large farm on which he grew grain. His combine was inadequate in relation to the acreage of grain that he harvested annually. As a result, on several occasions his

What do you mean by standard of living? Standard of living (SoL): It is incomer per capita (head) and it is determined by national income (GDP) divided through total pop


explain why each of the following factors influence the own price elasticity of demand for a comodity 1. Consumer preferences 2. the narrowness of definiton of the commodity