An online software producer has fixed costs of $40,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below. Complete the table (TC, MC, TR, and MR).
Quantity
TVC
Price
10,000
$15,000
$5
20,000
$20,000
$4
30,000
$30,000
$3
40,000
$50,000
$2
50,000
$80,000
$1
What should be the output at the profit maximization level?
How much should the firm produce if fixed cost increased to $60000?
An online software producer has fixed costs of $40,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below. Complete the table (TC, MC, TR, and MR).
| Quantity | TVC | Price |
| 10,000 | $15,000 | $5 |
| 20,000 | $20,000 | $4 |
| 30,000 | $30,000 | $3 |
| 40,000 | $50,000 | $2 |
| 50,000 | $80,000 | $1 |
What should be the output at the profit maximization level?
How much should the firm produce if fixed cost increased to $60000?
Related textbook solutions
Related questions
1. Profit Maximization under Monopoly.
1.1. Fill in the blanks in the following table using Excel formulas:
|
Q |
P |
TR |
TFC |
TVC |
AVC |
TC |
AC |
MR |
MC |
||
|
0 |
311,250 |
0.00 |
|||||||||
|
10,000 |
12.00 |
||||||||||
|
20,000 |
11.50 |
||||||||||
|
30,000 |
12.67 |
||||||||||
|
40,000 |
14.25 |
||||||||||
|
50,000 |
16.00 |
||||||||||
|
60,000 |
17.83 |
||||||||||
|
70,000 |
19.71 |
The demand function is given by: P=50-0.00025Q
1.2. Construct line charts for the Average Cost (AC), Average Variable Cost (AVC), Marginal Cost (MC), Marginal Revenue (MR), and Average Revenue (AR) on a Cartesian coordinate system.
