Question

GIVEN THE FOLLOWING BELOW, please answer problem 1 and problem 2. The values are already given, all you need is to graph.

The following are the hypothetical data of costs and revenues.

QUANTITY	TVC	TFC	TC = TVC + TFC	ATC/AC = TC/QTY	AVC = TVC/QTY	AFC = TFC/QTY	MC	PRICE	TR = PRICE X QUANTITY
0	0	5,000	5,000	0	0	0		0	0
5000	8,500	5,000	13,500	2.7	1.7	1	8,500	5	25,000
10,000	19,000.	5,000	24,000	2.4	1.9	2	10,500	4	40,000
15,000	24,000	5,000	29,000	1.93	1.6	3	5,000	3	45,000
20,000	36,000	5,000	41,000	2.05	1.8	4	12,000	2	40000
25,000	45,000	5,000	50,000	2	1.8	5	9,000	1	25000

Requirements: Solve the different types of costs and complete the table. Using the graphing paper graph the following.

1. Graph all total costs ; TC, TVC, TFC, TR & PROFIT OR LOSS( look at in your second table the profit & loss for graphing.)

	X axis	Y - axis
scale	5,000	5,000
distance	5 boxes	5,000

2. Graph all the averages/ per unit costs ; AC/ATC, AVC, AFC and MC, AR,&MR

QTY	TR	AR	MR	PROFIT OR LOSS
0	0	0	-	LOSS 5,000
5000	25,000	5	25,000	PROFIT 11,500
10,000	40,000	4	15,000	PROFIT 16,000
15,000	45,000	3	5,000	PROFIT 16,000
20,000	40,000	2	-5,000	LOSS 1,000
25,000	25,000	1	-15,000	LOSS 25,000

Specifications:

	X - axis	Y - axis
Scale	5,000	20
distance	5 boxes	2 boxes

Formula:

Profit/loss = TR – TC

        MC = NEW TC – OLD TC/ NEW QTY – OLD TY

TOTAL REVENUE (TR) = PRICE X QUANTITY

Answer 1

Answer to part 1 :-

In the graph Given below , red area represents loss where TC>TR and green area represents profits where TR> TC .

Answer to part 2 :-

The MR and MC will be calculated using the following formulae :-

MR = Given MR / Change in quantity

MC = TC_n - TC_n-1/ Change in quantity

Quantity	MC	MR
0	-	-
5000	8500/5000=1.7	5
10000	10500/5000=2.1	3
15000	5000/5000=1	1
20000	12000/5000=2.4	-1
25000	9000/5000=1.8	-3