Cost and Production

Q_D	P
0	2,500
10,000	2,300
20,000	2,100
30,000	1,850
40,000	1,600
50,000	1,480
60,000	1,450
70,000	1,360
80,000	1,200
90,000	1,000
100,000	800

Q	FC	VC	TC	MC	AFC	AVC	ATC	Profit		Q_D	P	TR	AR	MR	Change in Q	Change in P	Elasticity	Profit
0	10,000,000	0	10,000,000	-	-	-	-	-		0	2,500	-
10,000	10,000,000	8,000,000	18,000,000	800	1,000	800	1,800	5,000,000		10,000	2,300	23,000,000	2,300	2,300	2	(0.08)	-24.000000000000	5,000,000
20,000	10,000,000	15,000,000	25,000,000	700	500	750	1,250	17,000,000		20,000	2,100	42,000,000	2,100	1,900	0.66666667	(0.09)	-7.333333333333	17,000,000
30,000	10,000,000	21,000,000	31,000,000	600	333	700	1,033	24,500,000		30,000	1,850	55,500,000	1,850	1,350	0.4	(0.13)	-3.160000000000	24,500,000
40,000	10,000,000	23,000,000	33,000,000	200	250	575	825	31,000,000		40,000	1,600	64,000,000	1,600	850	0.28571429	(0.14)	-1.971428571429	31,000,000
50,000	10,000,000	32,000,000	42,000,000	900	200	640	840	32,000,000		50,000	1,480	74,000,000	1,480	1,000	0.22222222	(0.08)	-2.851851851852	32,000,000
60,000	10,000,000	45,000,000	55,000,000	1,300	167	750	917	32,000,000		60,000	1,450	87,000,000	1,450	1,300	0.18181818	(0.02)	-8.878787878788	32,000,000
70,000	10,000,000	58,000,000	68,000,000	1,300	143	828.5714	971	27,200,000		70,000	1,360	95,200,000	1,360	820	0.15384615	(0.06)	-2.401709401709	27,200,000
80,000	10,000,000	75,000,000	85,000,000	1,700	125	937.5	1,063	11,000,000		80,000	1,200	96,000,000	1,200	80	0.13333333	(0.13)	-1.066666666667	11,000,000
90,000	10,000,000	95,000,000	105,000,000	2,000	111	1055.556	1,167	(15,000,000)		90,000	1,000	90,000,000	1,000	(600)	0.11764706	(0.18)	-0.647058823529	(15,000,000)
100,000	10,000,000	120,000,000	130,000,000	2,500	100	1200	1,300	(50,000,000)		100,000	800	80,000,000	800	(1,000)	0.10526316	(0.22)	-0.473684210526	(50,000,000)

1. Is the QProf-Maxthe same numerical value as the QATC-MinOR QTR-Maxthat you computed in the previous part?If not, what is the mathematical relationship among the three? (Put the relationships among them by using inequality signs, like A>B>C.)
2. If you are a rational producer, which scale of operation(which of the above-mentioned Q's) do you chooseto operate on? In other words, what is the optimal scale of operation for your business, given the technology that you have and given the current market demand for your product?
3. DoesQProf-Maxminimizeyourper-unitcostofproduction(akaATC)?
4. DoesQProf-MaxmaximizeyourTotalRevenue (TR)?
5. Then, why do you still choose the QProf-Maxas the optimal point of operation? (Why do you choose this Q andnot any of the other two Q's?)
6. Now, pleaselook at thetwo comprehensive tables that you have madein the previous parts (Parts d and a).In particular, look at the numerical values of MCand MRassociated with your optimal scale of operation.

1. HowmuchistheMCassociatedwiththeQProf-Max?
2. HowmuchistheMRassociatedwiththeQProf-Max?
3. Now, look at the MC and MRcorresponding with the QProf-Max. What is the relationshipbetweenthese two?
4. Is this the relationship that you expected to be the case at this Quantity? In other words, do these two answers remind you of any 'optimality condition' that we have studied in this course? If so, which condition?

1. In Chapter 15, we learned that a monopoly does not have a supply curve, but instead, it does have a supply point.Whereisthesupplypointofyour company?Thatis,whatisthequantitysuppliedof Polymerconcrete by your company? How did you find this supply point? What is the price associated with this quantity supplied?
2. Now,pleasecomputethe"rateofprofit"(simplydefinedas (Profit/TC)*100%)for eachof QATC-Min,QTR-Max, and QProf-Maxand rank and report them in your Excel file.
3. If you are a rational producer, which scale of operation do you choose to operate on when you look at "the rates of profits" (which youcomputedin Part "t") and"total amounts of profits" (which you computed in Part "l")? Why?
4. Now, do you better understand the connections and applications of the theories how has it helped you>?