Question

# Q                              P       &nbsp

Q                              P                      TC                               TR                     MR                   MC                 TP

(OUTPUT)                   (PRICE)                     (TOTAL COST)

0                                    10                               10                                                          NA                    NA

1                                    10                               20

2                                    10                               24

3                                    10                               30

4                                    10                               38

5                10                               48

6                                    10                               60

7                                    10                               90

COMPLETE THE TABLE:          (NOTE TR TOTAL REVENUE: MR MARGINAL COST; TP TOTAL PROFITS)

PLEASE SHOW ME HOW YOU GET THE RESULT DONT JUST WRITE THE ANSWERS.

2. By using profit maximizing condition (you should use MR and MC ) identify the output level at which total profits are maximized.

PART2

GOOGLE(\$)             APPLE(\$)                       MICROSOFT(\$)

sales                                       50005                                 5725                                        3050

wages and salaries           29052                                 3932                                         400

cost of capital                           4000                                 1050                                          330

interest on debt                      7585                                   275                                             5

cost of materials                        6500                                   556                                          1650

(NOTE: COST OF CAPITAL > COST OF EQUITY CAPITAL)

3. CALCULATE accounting profit and economic profit for each of the firms.

4. list name of firm(s)which earn(s) more than normal profit.

#### Homework Answers

Answer #1

1.

 Q P TC TR=(P)(Q) MR=Change in TR MC= Change in TC TP= TR-TC 0 10 10 0 - - 0-10= -10 1 10 20 (1)(10)=10 10-0= 10 20-10= 10 10-20= -10 2 10 24 (2)(10)= 20 20-10= 10 24-20=4 20-24= -4 3 10 30 (3)(10)=30 30-20= 10 30-24=6 30-30=0 4 10 38 (4)(10)=40 40-30=10 38-30=8 40-38=2 5 10 48 (5)(10)=50 50-40=10 48-38=10 50-48=2 6 10 60 (6)(10)=60 60-50=10 60-48=12 60-60=0 7 10 90 (7)(10)=70 70-60=10 90-60=30 70-90= -20

Profit maximizing condition is when MR=MC. We can see from the above table that when Q=5 units ,MR=MC=10.Therefore, the profit maximizing output is 10 units.

Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question