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Gulp and Devour              
Output TR TC Profit AC Price MR MC Marginal
                Profit
1 135 100 35 100 135 135 100 35
2 260 200 60 100 130 125 100 25
3 375 300 75 100 125 115 100 5
4 480 400 80 100 120 105 100 5
5 575 500 75 100 115 95 100 -5
6 660 600 60 100 110 85 100 -15
7 735 700 35 100 105 75 100 -25
8 800 800 0 100 100 65 100 -35
Shady Enterprise              
Output TR TC Profit AC Price MR MC Marginal
                Profit
1 160 50 110 50 160 160 50 110
2 300 125 175 62.5 150 140 75 65
3 420 220 195 75 140 120 100 20
4 520 350 170 87.5 130 100 125 -25
5 600 500 100 100 120 80 150 -70
6 660 675 -15 112.5 110 60 175 -115
7 700 875 -175 125 100 40 200 -160
8 720 100 -380 137.5 90 20 225 -205

What is the profit-maximizing output for each case? Show that three criteria are equivalent: marginal cost equals marginal revenue, maximum profit, and marginal profit equals zero.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

I have done the charts can any one help me with the questions below.
c. Determine the profit maximizing level of output. Explain how you arrived at that conclusion.
d. What is the total profit at the profit maximizing level of output? How does that compare to profit at other levels of output?
e. What is the lowest price that Winsome Widgets will accept and continue to produce in the short run? Explain.
f. Is Winsome Widgets in long-run equilibrium? Explain

Consider the following table of costs for the Winsome Widget Factory, which operates in a perfectly competitive market. The market price faced by this firm is $6.00 per widget.
0
10
20
30
40
50
60
70
80
90
100

Total Fixed Cost
100
100
100
100
100
100
100
100
100
100
100











Total Variable Cost
0
50
80
100
140
200
275
375
500
650
900

Total Cost
$100
150
180
200
240
300
375
475
600
750
1,000
Average Fixed Cost
n/a
10
5
3.33
2.5
2
1.67
1.43
1.25
1.11
1

Average Variable Cost
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9

Average Total Cost
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9

Marginal Cost
n/a
50
30
20
40
60
75
100
125
150
250

Total Revenue
0
60
120
180
240
300
360
420
480
540
600

Marginal Revenue
n/a
60
60
60
60
60
60
60
60
60
60

Total Profit
-100
-90
-60
-20
0
0
-15
-55
-120
-210
-400

T Fixed Cost
100
100
100
100
100
100
100
100
100
100
100

Variable cost
50
80
100
140
200
275
375
500
650
900

AFC
n/a
10
5
3.33
2.5
2
1.67
1.43
1.25
1.11
1


AVC
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9


AVC
n/a
5
4
3.33
3.5
4
4.58
5.36
6.25
7.22
9


MC
n/a
50
30
20
40
60
75
100
125
150
250



TR
0
60
120
180
240
300
360
420
480
540
600



MR
n/a
60
60
60
60
60
60
60
60
60
60



TP
-100
-90
-60
-20
0
0
-15
-55
-120
-210
-400
c. Determine the profit maximizing level of output. Explain how you arrived at that conclusion.
d. What is the total profit at the profit maximizing level of output? How does that compare to profit at other levels of output?
e. What is the lowest price that Winsome Widgets will accept and continue to produce in the short run? Explain.
f. Is Winsome Widgets in long-run equilibrium? Explain

TFC

TVC

AFC

AVC

ATC

SMC

50000

  

xx

xx

xx

xx

5000

5000

50

50

100

50

5000

14000

25

70

95

90

5000

22000

16.66

73.33

90

80

5000

33000

12.5

82.5

95

110

5000

45000

10

90

100

120

5000

61000

8.33

101.66

110

160

5000

79000

7.14

112.85

120

180

5000

99000

6.25

123.75

130

200

5000

121000

5.55

134.44

140

220

5000

145000

5

145

150

240

The world market demand and supply curves for clay fire pots intersect at $190 per unit. Add columns 9, and 10 to show, respectively, total revenue (TR) and marginal revenue (MR). Add column 11 to show a profit (i.e., TR-TC). Add column 12 to show profit per unit (i.e., average profit). Add column 13 to show the profit margin (i.e., price minus average total cost). Submit your Excel spreadsheet to the DropBox. [Hint: At Q = 400: AVC = 82.50, SMC = 110, MR = 190, profit = 38,000, and profit margin = 95].

Q

TC

TFC

TVC

AFC

AVC

ATC

mc

TR

MR

Profit

Average

Profit
                     

Profit

Margin

0

7000

7000

NIL

NIL

NIL

NIL

NIL

0

NIL

-7000

NIL

nil

100

14000

7000

7000

70

70

140

70

19000

190

5000

50

26%

200

23000

7000

16000

35

80

115

90

38000

190

15000

75

39%

300

32000

7000

25000

23.33

83.33

106.67

90

57000

190

25000

83.33

44%

400

43000

7000

36000

17.5

90

107.5

110

76000

190

33000

82.5

43%

500

52000

7000

45000

14

90

104

90

95000

190

43000

86

45%

600

74000

7000

67000

11.67

111.67

123.33

220

114000

190

40000

66.67

35%

700

97000

7000

90000

10

128.57

138.57

230

133000

190

36000

51.43

27%

800

111000

7000

104000

8.75

130

138.75

140

152000

190

41000

51.25

27%

900

132000

7000

125000

7.78

138.89

146.67

210

171000

190

39000

43.33

23%

1000

152000

7000

145000

7

145

152

200

190000

190

38000

38

20%

(A)What level of output should the manager of Redstone choose to produce? Explain your choice in 50-100 words.

(B) Make a copy of your spreadsheet and triple the fixed costs to 21,000. How does this change your answer to question 3? Explain your result in 50-100 words.

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