Minimizing average total cost and maximizing profit

1. If Redstone wanted to minimize average total cost, it would produce how many units?

2. If Redstone wishes to maximize profit MARGIN, it should produce how many units.

3. What level of output should the manager of Redstone choose to produce? Explain briefly.

4. Now triple the fixed costs to 15,000 in your spreadsheet. How does this change your answer to question 3.

5. Suppose that Nancy Pelosi declares that clay fire pits are causing global warming, and demand for fire pits shrinks substantially in the U.S. (especially in California). Fire pit prices fall worldwide to $65. Now, the manager of Redstone should produce how many units? Explain your answer.

1. If Redstone wanted to minimize average total cost, it would produce how many units?
Redstone will produce 300 units at the lowest average total cost of $90 per unit.
2. If Redstone wishes to maximize profit MARGIN, it should produce how many units.
Redstone ...

Solution Summary

The minimizing average total cost and maximizing profits are examined. The level of outputs are given.

(1) Global Investment Group operates in a perfectly competitive industry with the following Costand Revenue data:
AverageTotalCost = $2.50; Quantity sold = 9000 Units; Price Per Unit = $3.50; Marginal Revenue = $3.50; Marginal Cost = $3.50:
(a) What is the loss minimizing output level for the firm?
(b) What is the A

Please help with the following problem.
Optimization:
Giant Screen TV, Inc, is a manufacturer and distributor of high-resolution 50-inch television monitors and consoles for individual and commercial customers. Revenue andcost relations are:
TR = $4,500Q - 0.1Q^2
MR = $4,500 - 0.2Q
TC = $2,000,000 + $1,500Q + 0.5Q^2
MC

Complete Table
1. Summarize your calculations and use Microsoft Excel.
2. Using Excel, draw one graph showing average fixed costs, average variable costs, averagetotalcosts, marginal revenue, and marginal costs.
3.Using the data in the table and on your graph, what is the profitmaximizing, or loss minimizing level

At a product price of $56, will this firm produce in the short run? Why or why not? If it is preferable to produce, what will be the profit-maximizing or loss minimizing output? Explain. What economic profit or loss will the firm realize per unit of output?
TotalAverageAverageAverage

John is considering opening a shop to make desks. He estimates the cost information for the first-through-the-ninth desk (nine is his estimated maximum monthly output).
The first desk costs $520 to produce, including $380 in overhead expenses.
The price of the desk has been set at $199.
The additional desk have the fol

Assume that the cost data in the top table of the next column are for purely competitive producer: *TP= Total Product; *AFC= Average fixed Cost; *AVC= Average Variable Cost; *ATC= AverageTotalCost; *MC= Marginal Cost TP AFC AVC ATC MC 0 1 $60.00 $45.00 $105.00 $45.00 2 $30.00 $42.50 $72.50 $40.00 3 $20.00 $40.00 $60.00 $35.00

Output FC VC TC TR Profit/Loss
0 100 0
1 100 100
2 100 180
3 100 300
4 100 440
5 100 600
6 100 780
A. Complete the table
B. At what output rate does the firm maximize proft or minimize loss?
C. What is t

Problems
1- Given the following total-revenue function:
TR=9Q-Q²
(a) Derive the total-, average-, and marginal-revenue schedules from Q = 0 to Q = 6 by 1' s.
(b) On the same set of axes, plot the total-,average-,and marginal-revenue schedules of part (a)
2- Given the follow total-cost schedule:
Q 0 1 2 3 4
TC