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from sprinkler to drip (C to D and E to F). Assume a f are two pairs of almond production cost curves showing technological change in Irrigation market price of $60/unit. For each set of curves, label the curves and fill in the tables that indicates the profit-maximizing level of output (Q), the marginal cost (MC), the average total cost (ATC), the total revenue (TR), the total cost (TC), the total profit (x), and, the average profit (A) for each pair of costs curves. Make sure to draw the appropriate lines in the graphs and show your calculations (show your work) below the table. Cost Curves C & D 105 100 9

from sprinkler to drip (C to D and E to F). Assume a f are two pairs of almond production cost curves showing technological change in Irrigation market price of $60/unit. For each set of curves, label the curves and fill in the tables that indicates the profit-maximizing level of output (Q), the marginal cost (MC), the average total cost (ATC), the total revenue (TR), the total cost (TC), the total profit (x), and, the average profit (A) for each pair of costs curves. Make sure to draw the appropriate lines in the graphs and show your calculations (show your work) below the table. Cost Curves C & D 105 100 9

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The document presents a problem involving almond production cost curves under two different technological conditions, labeled as curves C and D. Here's a detailed transcription and analysis intended for an educational context: ### Text Description: The task involves using almond production cost curves to illustrate technological changes in irrigation from sprinkler to drip systems. You are asked to: 1. **Label the Curves:** Assign correct labels (C or D) to each curve. 2. **Assume a Market Price:** The price is set at $60 per unit. 3. **Fill in the Tables:** For each set of curves, you need to determine: - The profit-maximizing level of output (Q*). - The marginal cost (MC). - The average total cost (ATC). - The total revenue (TR). - The total cost (TC). - The total profit (π*) and average profit (Aπ*) for each cost curve. ### Graph Description: The provided graph plots the price on the Y-axis and the quantity on the X-axis. Key features include: - **Curves:** - Two curves are plotted, labeled as C and D. - Each curve shows different cost behaviors over various quantities. - **Grid:** - The graph is divided with a grid to allow precise reading of quantity and price values. - **Axes:** - The Y-axis (Price) ranges from 0 to 105. - The X-axis (Quantity) ranges from 0 to 55. ### Table Description: Below the graph, there is a table titled "Cost Curves C & D" with columns for calculations: - Columns: - **Price:** The market price is fixed at $60. - **Q\* (Quantity):** The profit-maximizing level of output. - **MC (Marginal Cost):** The cost of producing an additional unit. - **ATC (Average Total Cost):** Total cost per unit produced. - **TR (Total Revenue):** Calculated as Price x Quantity. - **TC (Total Cost):** Total cost at each level of production. - **π\* (Total Profit):** Total revenue minus total cost. - **Aπ\* (Average Profit):** Average profit per unit. ### Instructions: - Draw lines on the graph to represent each calculation. - Show all performed calculations clearly in the table. This assignment helps in
Transcribed Image Text:The document presents a problem involving almond production cost curves under two different technological conditions, labeled as curves C and D. Here's a detailed transcription and analysis intended for an educational context: ### Text Description: The task involves using almond production cost curves to illustrate technological changes in irrigation from sprinkler to drip systems. You are asked to: 1. **Label the Curves:** Assign correct labels (C or D) to each curve. 2. **Assume a Market Price:** The price is set at $60 per unit. 3. **Fill in the Tables:** For each set of curves, you need to determine: - The profit-maximizing level of output (Q*). - The marginal cost (MC). - The average total cost (ATC). - The total revenue (TR). - The total cost (TC). - The total profit (π*) and average profit (Aπ*) for each cost curve. ### Graph Description: The provided graph plots the price on the Y-axis and the quantity on the X-axis. Key features include: - **Curves:** - Two curves are plotted, labeled as C and D. - Each curve shows different cost behaviors over various quantities. - **Grid:** - The graph is divided with a grid to allow precise reading of quantity and price values. - **Axes:** - The Y-axis (Price) ranges from 0 to 105. - The X-axis (Quantity) ranges from 0 to 55. ### Table Description: Below the graph, there is a table titled "Cost Curves C & D" with columns for calculations: - Columns: - **Price:** The market price is fixed at $60. - **Q\* (Quantity):** The profit-maximizing level of output. - **MC (Marginal Cost):** The cost of producing an additional unit. - **ATC (Average Total Cost):** Total cost per unit produced. - **TR (Total Revenue):** Calculated as Price x Quantity. - **TC (Total Cost):** Total cost at each level of production. - **π\* (Total Profit):** Total revenue minus total cost. - **Aπ\* (Average Profit):** Average profit per unit. ### Instructions: - Draw lines on the graph to represent each calculation. - Show all performed calculations clearly in the table. This assignment helps in
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Step 1

Optimal level of production is achieved at the point where marginal revenue equals marginal cost . Also in the case of competitive market such as almonds market marginal revenue equals price .

So , optimal level of production : P = MC 

 

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