3. The graph below shows the Total Revenue, Total Costs and the units of output produced by Firm A. Use the following graph to answer the questions that follow. Quantity (Units) Total Revenue (TR) Marginal Revenue (MR) Total Cost (TC) Marginal Cost (MC) 0 0 50 1 90 80 2 180 120 a. What is the Marginal Revenue of the 5th unit of output? b. What is the Fixed Cost of this firm? 3 270 170 4 360 230 5 450 300 6 540 380 7. 630 470 8 720 570 c. What is the optimal production amount of this firm? (Hint: What is the condition that determines production decisions in a perfectly competitive market?) Show your mathematical work.

3. The graph below shows the Total Revenue, Total Costs and the units of output produced by Firm A. Use the following graph to answer the questions that follow. Quantity (Units) Total Revenue (TR) Marginal Revenue (MR) Total Cost (TC) Marginal Cost (MC) 0 0 50 1 90 80 2 180 120 a. What is the Marginal Revenue of the 5th unit of output? b. What is the Fixed Cost of this firm? 3 270 170 4 360 230 5 450 300 6 540 380 7. 630 470 8 720 570 c. What is the optimal production amount of this firm? (Hint: What is the condition that determines production decisions in a perfectly competitive market?) Show your mathematical work.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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