TFC TVC 28 28 28 28 28 28 28 0 2 3 4 5 6 26 40 56 74 94 Calculate TC, MC, AFC, A
ID: 1126312 • Letter: T
Question
TFC TVC 28 28 28 28 28 28 28 0 2 3 4 5 6 26 40 56 74 94 Calculate TC, MC, AFC, AVC, and ATC when Q = 2. TC = $54.00 , MC-S 12.00 , AFC-s 14.00 , AVC = $13.00 , ATC = $27.00 If the market price is $19, how many units of output will this firm produce? units of output. Calculate the firm's profit: $ Will the firm operate or shut down in the short run? The firm In the long run, the firm should A. neither expand nor shut down because short-run prof B. expand because short-run profits are zero C. shut down because short-run profits are negative. D. expand because short-run profits are negative. could shut down or operate will shut down will operateExplanation / Answer
Ans)
When Q(using the table calculated below)
TC= 54 MC= 14 AFC=28 AVC=14 ATC=42
The firm will produce until MC<=MR this happens at 5 units.
Profit=TR-TC So the profit is -7.
The price should be below the minimum of AVC (13) for the firm to shut down, since the price(19) is above this, therefore, the firm will produce in the short run although it is incurring losses.
C. Shut down because short-run profits are negative.
Tables with formulas:
Q TFC TVC TC=FC+VC MC=TCn-TCn-1 AFC=FC/Q AVC=VC/Q ATC=TC/Q P TR=19*Q MR=TRn-TRn-1 0 28 0 28 19 0 1 28 14 42 14 28 14 42 19 19 19 2 28 26 54 12 14 13 27 19 38 19 3 28 40 68 14 9.333333333 13.33333333 22.66666667 19 57 19 4 28 56 84 16 7 14 21 19 76 19 5 28 74 102 18 5.6 14.8 20.4 19 95 19 6 28 94 122 20 4.666666667 15.66666667 20.33333333 19 114 19Related Questions
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