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variable cost schedule

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Assume that a firm sells its product in a perfectly competitive market. The firm's fixed costs (including a "normal" return on the funds the entrepreneur has invested in the firm) are equal to $100 and its variable cost schedule is as follows:

Output (Units) Variable Cost per Unit
50 $5.00
100 4.50
150 4.00
200 3.50
250 3.00
300 2.75
350 3.00
400 3.50

a.Find the marginal cost and average total cost schedules for the firm.
b.If the prevailing market price is $4.50, how many units will be produced and sold?
c.What are total profits and profit per unit at the output level determined in part (b)?
d.Is the industry in long-run equilibrium at this price? Explain

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Hello!

Question a
Output (Units) Variable Cost per Unit Marginal Cost per unit Avg Total Cost
50 $5.00 $5 $7
100 4.50 4 5.50
150 4.00 3 4.66
200 3.50 2 4
250 ...

Solution Summary

Assess the variable cost schedule.

$2.19
See Also This Related BrainMass Solution

Use the following data of a firm's total cost schedules to calculate its average variable cost, average fixed cost, average total cost, and marginal cost schedules

Use the following data of a firm's total cost schedules to calculate its average variable cost, average fixed cost, average total cost, and marginal cost schedules.

Output Total Cost Total Variable Cost Total Fixed Cost
1 $2075.00 $ 75.00 $2000.00
2 2140.00 140.00 2000.00
3 2180.00 180.00 2000.00
4 2280.00 280.00 2000.00
5 2400.00 400.00 2000.00

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