4. Complete the following cost schedules: Quantity TC ATC MC 0 9 xxx xxx 1 12 12

Question

4. Complete the following cost schedules: Quantity TC ATC MC 0 9 xxx xxx 1 12 12 3 2 16 8 4 3 21 7 5 4 30 7.5 9 5 40 8 10 6 52 8.66 12 7 66 9.42 14 Assuming the   price of this product is $10, at what output rate is ( a ) Total revenue maximized? ( b ) ATC minimized? ( c ) Profit per unit maximized? ( d ) Total profit maximized? 4. Complete the following cost schedules: Quantity TC ATC MC 0 9 xxx xxx 1 12 12 3 2 16 8 4 3 21 7 5 4 30 7.5 9 5 40 8 10 6 52 8.66 12 7 66 9.42 14 Assuming the   price of this product is $10, at what output rate is ( a ) Total revenue maximized? ( b ) ATC minimized? ( c ) Profit per unit maximized? ( d ) Total profit maximized?

Explanation / Answer

A) TOTAL REVENUE MAXIMISED AT 7 UNITS

B) ATC MAXIMISED AT 1 UNIT

C) PROFIT PER UNIT MAXIMISED AT 3 UNITS

D) TOTAL PROFIT MAXIMISED AT UNITS 4 & 5

Quantity TC ATC MC PRICE TR PROFIT PROFIT PER UNIT 0 9 xxx xxx 10 0 -9 0 1 12 12 3 10 10 -2 -2 2 16 8 4 10 20 4 2 3 21 7 5 10 30 9 3 4 30 7.5 9 10 40 10 2.5 5 40 8 10 10 50 10 2 6 52 8.7 12 10 60 8 1.3 7 66 9.4 14 10 70 4 0.6

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