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
What is the difference between wealth and income? Difference between wealth and income: • Wealth , which is a stock value that is the current value of assets for example b

What happens during a business cycle of economy, and what can be done about it? Business cycle of economy: a. The consequences of recessions and expansions onto unemploymen

Suppose that EBV is considering a $5m Series A investment in Newco. EBV proposes to structure the investment as 5m shares of CP with FV of $5m, one-to-one conversion to common, and

definition of money markets

How can value management be utilized to compare various possible design solutions? When the bottom-level objectives for a project have been acknowledged through these technique



Q.No2 Read the following situation Consider the following parlor game to be played between two players. Each player begins with three chips: One red, one white and one blue. Ea

Why do you assume there are an increasing number of organisations related along with the development of quality practices for IS development? Information systems frequently rep

What is the function of the International Monetary Fund, in the promotion of development? The International Monetary Fund (IMF) is the central institution of the international