Scenario

As an economic consultant at Lightning Volt Automotive, your task is to calculate production costs and identify the various production costs that illustrate total cost curves as well as average and marginal cost curves. Then you will determine the firm's current profit-maximizing price and quantity.

Instructions

Use the Excel template linked here to complete the following tasks. All work must be shown to receive credit. Submit the completed spreadsheet.

• Calculate the total revenue, marginal revenue, profits or losses, and production costs.
• make a line plot that shows total costs, total fixed costs, and total variable costs.
• make a line plot that shows production costs. Include AFC, AVC, ATC, and MC.
• Identify the profit-maximizing price and quantity. Explain your answer.

Price

Total Output

TR

MR

TC

TFC

TVC

AFC

AVC

ATC

MC

Profits / Losses

10

0

100

20

10

150

30

20

500

35

30

825

40

40

1375

45

50

1850

50

60

2400

Q4

Profit maximizing production level

Profit maximizing price