Output TVC TC MC AVC ATC PRICE TR MR 0 2 1 6 4 6 8 8 2 8 2 4 14 6 3 12 4 4 18 4
ID: 1113463 • Letter: O
Question
Output
TVC
TC
MC
AVC
ATC
PRICE
TR
MR
0
2
1
6
4
6
8
8
2
8
2
4
14
6
3
12
4
4
18
4
4
20
8
5
21
3
5
35
15
7
23
2
6
60
25
10
23
0
7
8
The firm depicted above should:
shut-down immediately
produce 3 units and make a economic profit
produce 4 units and make an economic profit
produce 6 units and make an short-run loss
Output
TVC
TC
MC
AVC
ATC
PRICE
TR
MR
0
0
180
1
17
197
17
17
197
18
18
2
30
210
13
15
105
34
16
3
42
222
12
14
74
48
14
4
60
240
18
15
60
60
12
5
85
265
25
17
53
70
10
6
120
300
35
20
50
78
8
7
170
350
50
24.286
50
84
6
8
245
425
75
30.625
53.125
88
4
The firm depicted above should:
shut-down immediately
produce 3 units and make an short-run loss
produce 4 units and make an economic profit
produce 6 units and normal profit
Output
TVC
TC
MC
AVC
ATC
PRICE
TR
MR
0
2
1
6
4
6
8
8
2
8
2
4
14
6
3
12
4
4
18
4
4
20
8
5
21
3
5
35
15
7
23
2
6
60
25
10
23
0
7
8
Explanation / Answer
1. The firm depicted above should
b.produce 3 units and make an economic profit.
Profit will be maximised when MR= MC.This condition is fulfiled at 3 units of production.
2. The firm depicted above should
a. shut down immediately
When price at each level is greater than the AVC then it is beneficial for the firm to shut down. We get the price by dividing TR by Quantity. Here in the table at each level of output price> AVC.
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