Question

complete the table and select the best output you would advise the company to produce when the price of the product is 75 dollar, 99 dollar   

Q	TC	TFC	TVC	AC	AFC	AVC	MC
0	120			X	X	X	X
1				265			145
2			264
3				161
4							85
5			525				77
6				120
7						97
8			768
9						97
10							127

Answer 1

Ans:

Q	TC	TFC	TVC	AC	AFC	AVC	MC
0	120	120	0	X	X	X	X
1	265	120	145	265	120	145	145
2	384	120	264	192	60	132	119
3	483	120	363	161	40	121	99
4	568	120	448	142	30	112	85
5	645	120	525	129	24	105	77
6	720	120	600	120	20	100	75
7	799	120	679	114.14	17.14	97	79
8	888	120	768	111	15	96	89
9	993	120	873	110.33	13.33	97	105
10	1120	120	1000	112	12	100	127

Explanation:

TC = TFC + TVC

AC = TC / Q

AFC = TFC / Q

AVC = TVC / Q

MC = ∆ TC / ∆ Q

Ans:

At price $75 , the company should produce 6 units of output.

At price $99 , the company should produce 3 units of output.

Explanation:

Under perfect competition , the profit maximization condition is where price equals marginal cost ( P = MC).