2) The Trouser Company has fixed costs of 2,000 per week. In addition, we have some information about its marginal costs (MC) and total variable costs (TVC). Output MC 140 TVC 30 59 2,850 4,080 5,310 6,000 100 80 60 90 120 150 275 14,250 32 59 140 8,160 a) For each of the output levels in the table, calculate the Trouser Company's average variable costs (AVC) and average (total) cost (AC) Output 30 60 90 100 120 150 MC 140 59 32 59 80 140 275 TVC 2,850 4,080 5,310 6,000 8,160 14,250
2) The Trouser Company has fixed costs of 2,000 per week. In addition, we have some information about its marginal costs (MC) and total variable costs (TVC). Output MC 140 TVC 30 59 2,850 4,080 5,310 6,000 100 80 60 90 120 150 275 14,250 32 59 140 8,160 a) For each of the output levels in the table, calculate the Trouser Company's average variable costs (AVC) and average (total) cost (AC) Output 30 60 90 100 120 150 MC 140 59 32 59 80 140 275 TVC 2,850 4,080 5,310 6,000 8,160 14,250
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 5CQQ
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Question
![2) The Trouser Company has fixed costs of 2,000 per week. In addition, we have
some information about its marginal costs (MC) and total variable costs (TVC).
Output
MC
TVC
30
60
90
100
120
150
140
59
32
59
80
6,000 8,160 14,250
140
275
2,850 4,080 5,310
a) For each of the output levels in the table, calculate the Trouser Company's
average variable costs (AVC) and average (total) cost (AC)
Output
30
60
90
100
120
150
MC
140
59
32
59
80
140
275
TVC
2,850
4,080
5,310
6,000
8,160
14,250
b) Sketch a diagram showing the marginal cost curve, the average variable cost
curve, and the firm's short run supply curve.
c) Explain how the firm would maximise its profit, assuming that it faces conditions
of perfect competition, in both the short run and the long run. Be careful to explain
the conditions under which the firm would shut down or close.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6b045df-0c56-41dd-816d-1a14e1b5e0db%2F9091c87d-2a41-409f-9026-a182f63f7ff2%2F9abgoj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2) The Trouser Company has fixed costs of 2,000 per week. In addition, we have
some information about its marginal costs (MC) and total variable costs (TVC).
Output
MC
TVC
30
60
90
100
120
150
140
59
32
59
80
6,000 8,160 14,250
140
275
2,850 4,080 5,310
a) For each of the output levels in the table, calculate the Trouser Company's
average variable costs (AVC) and average (total) cost (AC)
Output
30
60
90
100
120
150
MC
140
59
32
59
80
140
275
TVC
2,850
4,080
5,310
6,000
8,160
14,250
b) Sketch a diagram showing the marginal cost curve, the average variable cost
curve, and the firm's short run supply curve.
c) Explain how the firm would maximise its profit, assuming that it faces conditions
of perfect competition, in both the short run and the long run. Be careful to explain
the conditions under which the firm would shut down or close.
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