Econ profit and cost問題
A profit maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed costs of $200.
a. Calculate profit level
b. Calculate marginal cost
c. Calculate average variable cost
d. Is the efficient scale of the firm more than, less than or exactly 100 units?Explain.
- 7 years agoFavorite Answer
(a) profit level係唔係即係profit？
(b) Marginal cost (MC)
=Total cost of producing 101 units - Total cost of producing 100 units
[=Total cost of producing (n+1) units - Total cost of producing n units]
(c) Variable cost
(d) In a competitive market, average revenue(AR)=marginal revenue (MR)
In this case, MR=AR=$10, MC=$8
Since MR>MC, the firm can increase its profit by increasing the output.
Therefore, the efficient scale of the firm is more than 100 units.