### Production Cost and Revenue Analysis Table This table is an analytical tool designed to help understand the relationship between production costs, revenues, and profits as the quantity of units produced varies. It includes several key metrics in the context of microeconomic analysis. #### Columns Explained: 1. **Q: Units Produced** - This column indicates the quantity of units produced, ranging from 0 to 1000. 2. **TC: Total Cost** - Total cost incurred at each level of production. 3. **TFC: Total Fixed Cost** - Costs that do not change with the level of output. This value remains constant at 6000. 4. **TVC: Total Variable Cost** - Costs that vary with the level of output. 5. **AFC: Average Fixed Cost** - Calculated as Total Fixed Cost divided by the quantity of units produced. Not defined for zero production. 6. **AVC: Average Variable Cost** - Calculated as Total Variable Cost divided by the quantity of units produced. 7. **ATC: Average Total Cost** - Sum of Average Fixed Cost and Average Variable Cost. Also calculated as Total Cost divided by quantity. 8. **SMC: Short-run Marginal Cost** - The change in Total Cost that arises from producing an additional unit of output. 9. **TR: Total Revenue** - Total income from sales, calculated as the price per unit ($300) multiplied by quantity. 10. **MR: Marginal Revenue** - The change in Total Revenue from selling one additional unit. 11. **TP: Total Profit** - Total Revenue minus Total Cost. 12. **AP: Average Profit** - Total Profit divided by the quantity of units produced. 13. **MP: Profit Margin** - Indicates the change in Total Profit per unit change in output or calculated as Marginal Revenue minus Marginal Cost. #### Sample Formulas: - **Logical Formula** for Total Cost: `TVC + TFC` - **Excel Formula for 200 units (Example)**: - AFC: `C8/A8` - AVC: `D8/A8` - ATC: `B8/A8` or `E8 + F8` - SMC: `(B8-B7)/(A8-A7)` - TR: `A8*300` - MR: `(I8-I7)/(A8-A7)` - TP: `I8 - B8`
Make a copy of your spreadsheet and double the fixed costs. How does this change your answer to question 2? Explain in detail.
Q TC TFC TVC AFC
0 6000 6000 Infinity infinity 0 -6000 infinity
100 12000 6000 6000 60.0 60.00 120.0 60.0 30000 300.0 18000 180.0 240.0
200 15000 6000 9000 30.0 45.0 75.0 30.0 60000 300.0 45000 225.0 270.0
300 21000 6000 15000 20.0 50.0 70.0 60.0 90000 300.0 69000 230.0 240.0
400 33000 6000 27000 15.0 67.5 82.5 120.0 120000 300.0 87000 217.5 180.0
500 48000 6000 42000 12.0 84.0 96.0 150.0 150000 300.0 102000 204.0 150.0
600 65000 6000 59000 10.0 98.3 108.3 170.0 180000 300.0 115000 191.7 130.0
700 83000 6000 77000 8.6 110.0 118.6 180.0 210000 300.0 127000 181.4 120.0
800 102000 6000 96000 7.5 120.0 127.5 190.0 240000 300.0 138000 172.5 110.0
900 123000 6000 117000 6.7 130.0 136.7 210.0 270000 300.0 147000 163.3 90.0
1000 158000 6000 152000 6.0 152.0 158.0 350.0 300000 300.0 142000 142.0 -50.0
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