Market Forms and Cost & Profit Calculations
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1. Summarize your calculations and use Microsoft Excel.
2. Using Excel, draw one graph showing average fixed costs, average variable costs, average total costs, marginal revenue, and marginal costs.
3.Using the data in the table and on your graph, what is the profit maximizing, or loss minimizing level of output? Explain and justify your answers.
Output Average Fixed cost Average Variable Cost Average Total Cost Marginal Cost Price Total Revenue Marginal Revenue
0 $ 345.00
1 $ 180.00 $ 135.00 $ 315.00 $ 300.00
2 $ 90.00 $ 127.50 $ 217.50 $ 249.00
3 $ 60.00 $ 120.00 $ 180.00 $ 213.00
4 $ 45.00 $ 112.50 $ 157.50 $ 189.00
5 $ 36.00 $ 111.00 $ 147.00 $ 165.00
6 $ 30.00 $ 112.50 $ 142.50 $ 144.00
7 $ 25.71 $ 115.70 $ 141.41 $ 126.00
8 $ 22.50 $ 121.90 $ 144.40 $ 111.00
9 $ 20.00 $ 130.00 $ 150.00 $ 99.00
10 $ 18.00 $ 139.50 $ 157.50 $ 87.00
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Solution Summary
This solution gives a detailed explanation of all the calculations required to complete a Costs table for a firm and graph it in Microsoft Excel. The solution also explains how to determine the firm's profit-maximizing output.
Solution Preview
1. See the attached file.
Summary of calculations:
TFC = AFC when Q = 1, so TFC = 180
AFC = TFC/Q
AVC = TVC/Q
ATC = ...
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