M3A2

Topics: Costs, Marginal cost, Variable cost Pages: 2 (659 words) Published: August 21, 2013
1. Table 1
Column1| Column 2| Column 3| Column 4| Column 5| Column 6| Column 7| Column 8| Column 9| Column 10| Column 11| Output| Price per unit| Total Fixed Cost| Total Variable Cost| Total Cost| Average Fixed Cost| Average Variable Cost| Average Total Cost| Marginal| Marginal Revenue| Total Revenue| Level| | | | | | | | Cost| | |

0| 165| 125|  $             -   | $165.00|  NA|  | $165.00|  | 1| $165.00| $125.00| $113.00| $238.00| $125.00| $113.00| $238.00| $73.00| $165.00| $165.00| 2| $165.00| $125.00| $213.00| $338.00| $62.50| $106.50| $169.00| $100.00| $165.00| $330.00| 3| $165.00| $125.00| $300.00| $425.00| $41.67| $100.00| $141.67| $87.00| $165.00| $495.00| 4| $165.00| $125.00| $375.00| $500.00| $31.25| $93.75| $125.00| $75.00| $165.00| $660.00| 5| $165.00| $125.00| $463.00| $588.00| $25.00| $92.60| $117.60| $88.00| $165.00| $825.00| 6| $165.00| $125.00| $563.00| $688.00| $20.83| $93.83| $114.67| $100.00| $165.00| $990.00| 7| $165.00| $125.00| $675.00| $800.00| $17.86| $96.43| $114.29| $112.00| $165.00| $1,155.00| 8| $165.00| $125.00| $813.00| $938.00| $15.63| $101.63| $117.25| $138.00| $165.00| $1,320.00| 9| $165.00| $125.00| $975.00| $1,100.00| $13.89| $108.33| $122.20| $162.00| $165.00| $1,485.00| 10| $165.00| $125.00| $1,163.00| $1,288.00| $12.50| $116.30| $128.80| $188.00| $165.00| $1,650.00| Total Cost = Total Fixed Cost + Total Variable Cost

Average Fixed Cost = Total Fixed Cost/Output Quantity
Average Variable Cost = Total Variable Cost/Output Quantity
Average Total Cost = Total Cost/Output Quantity
Marginal Cost = ∆ in Total Cost/∆ in Output Quantity
Marginal Revenue = ∆ in Total Revenue that results from selling 1 more unit of output. Total Revenue = Price x Quantity Output (McConnell, 2010)
2. The MC=MR rule is “The principle that a firm will maximize its profit (or...
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