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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
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) |
- 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.)
- 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?
- DoesQProf-Maxminimizeyourper-unitcostofproduction(akaATC)?
- DoesQProf-MaxmaximizeyourTotalRevenue (TR)?
- 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?)
- 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.
- HowmuchistheMCassociatedwiththeQProf-Max?
- HowmuchistheMRassociatedwiththeQProf-Max?
- Now, look at the MC and MRcorresponding with the QProf-Max. What is the relationshipbetweenthese two?
- 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?
- 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?
- Now,pleasecomputethe"rateofprofit"(simplydefinedas (Profit/TC)*100%)for eachof QATC-Min,QTR-Max, and QProf-Maxand rank and report them in your Excel file.
- 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?
- Now, do you better understand the connections and applications of the theories how has it helped you>?
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