The graph below provides revenue and cost information for a perfectly competitive firm producing paper clips.
Output Total Revenue Total Variable Cost Total Fixed Cost
1 $1 000 $1 500 $500
2 $2 000 $2 000 $500
3 $3 000 $2 600 $500
4 $4 000 $3 900 $500
5 $5 000 $5 000 $500
1. How much are total fixed costs?
2. About how much are total variable costs if 5,000 paper clips are produced?
3. What is the price of a paper clip?
4. What is the average revenue from producing paper clips?
5. What is the marginal revenue of producing paper clips?
6. Over what output range will this firm earn economic profits? 7. Over what output range will this firm incur economic losses? 8. What is the slope of the total revenue curve?
9. What is the slope of the total cost curve at the profit-maximizing number of paper clips per hour?
10. At about how many paper clips per hour do economic profits seem to be at a maximum?
Ответы
Ответ:
1. Total fixed costs are $500.
2. Total variable costs for producing 5,000 paper clips are $5,000.
3. The price of a paper clip is not provided in the given data.
4. Average revenue from producing paper clips is equal to total revenue divided by the quantity. Average revenue for each unit is $1,000.
5. Marginal revenue is the change in total revenue resulting from a one-unit change in output. In this case, it's $1,000 for each additional paper clip produced.
6. The firm will earn economic profits over the output range where average total cost is below the price of a paper clip.
7. The firm will incur economic losses over the output range where average total cost is above the price of a paper clip.
8. The slope of the total revenue curve is equal to the price of a paper clip.
9. The slope of the total cost curve at the profit-maximizing number of paper clips per hour is equal to the marginal cost.
10. Economic profits seem to be at a maximum where marginal cost equals marginal revenue. The given data doesn't provide information on marginal cost, so this cannot be determined without additional details.