- A B C D G H Question 3: Profit Maximization for a Perfectly Competitive Firm (Parts a - g) 3 1 5 6 7 E You will complete the rest of table as specified in the following parts of this assignment. b) Use Excel functions to calculate TC = 20 + 10*Q+ 2*Q² and MC. Verify that MC = 10 + 4*Q. c) Use Excel functions to calculate Profit = TR - TC. d) Use the MAX function in Excel to find the highest profit this perfectly competitive firm can earn. Hints: F TR =P*Q MR = change in TR/ change in Q MC change in TC/ change in Q Profit = TR - TC Profit is max at Q, such that MR = MC. Answers: I Parts (a)- (c): J a) Create a table with 15 rows and 8 columns. Name the columns Price (P), Quantity (Q), Total revenue (TR), Marginal revenue (MR), Total cost (TC), Marginal cost (MC), Profit, and Average total cost (ATC Fill in price of $50 and enter values of 0-13 for quantity. Use Excel functions to calculate TR and MR. P Q TR MR TC MC Profit ATC What is the profit-maximizing output? Verify that it satisfies the condition MR = MC. e) Use the MIN function in Excel to find the break-even price of this company. f) Re-do the table you created in the previous parts if FC increases to $30. Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d). + g) Re-do the table you created in the previous parts if the output price decreases to $42. Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d). K L M Part (f): N To O TR
- A B C D G H Question 3: Profit Maximization for a Perfectly Competitive Firm (Parts a - g) 3 1 5 6 7 E You will complete the rest of table as specified in the following parts of this assignment. b) Use Excel functions to calculate TC = 20 + 10*Q+ 2*Q² and MC. Verify that MC = 10 + 4*Q. c) Use Excel functions to calculate Profit = TR - TC. d) Use the MAX function in Excel to find the highest profit this perfectly competitive firm can earn. Hints: F TR =P*Q MR = change in TR/ change in Q MC change in TC/ change in Q Profit = TR - TC Profit is max at Q, such that MR = MC. Answers: I Parts (a)- (c): J a) Create a table with 15 rows and 8 columns. Name the columns Price (P), Quantity (Q), Total revenue (TR), Marginal revenue (MR), Total cost (TC), Marginal cost (MC), Profit, and Average total cost (ATC Fill in price of $50 and enter values of 0-13 for quantity. Use Excel functions to calculate TR and MR. P Q TR MR TC MC Profit ATC What is the profit-maximizing output? Verify that it satisfies the condition MR = MC. e) Use the MIN function in Excel to find the break-even price of this company. f) Re-do the table you created in the previous parts if FC increases to $30. Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d). + g) Re-do the table you created in the previous parts if the output price decreases to $42. Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d). K L M Part (f): N To O TR
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 3: Profit Maximization for a Perfectly Competitive Firm (Parts a - g)
E
Answers:
B
TR =P*Q
MR = change in TR/ change in Q
MC = change in TC/ change in Q
Profit= TR - TC
Profit is max at Q, such that MR = MC.
Parts (a) - (c):
P
Q
Formulas
F
TR
Data
SV
You will complete the rest of table as specified in the following parts of this assignment.
b) Use Excel functions to calculate TC = 20 + 10*Q + 2*Q² and MC. Verify that MC = 10 + 4*Q.
1
c) Use Excel functions to calculate Profit = TR - TC.
2 d) Use the MAX function in Excel to find the highest profit this perfectly competitive firm can earn.
3 What is the profit-maximizing output? Verify that it satisfies the condition MR = MC.
4
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MR
Av...
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TC
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e) Use the MIN function in Excel to find the break-even price of this company.
f) Re-do the table you created in the previous parts if FC increases to $30.
Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d).
7 g) Re-do the table you created in the previous parts if the output price decreases to $42.
8
Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d).
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Profit
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a) Create a table with 15 rows and 8 columns.
Name the columns Price (P), Quantity (Q), Total revenue (TR), Marginal revenue (MR), Total cost (TC), Marginal cost (MC), Profit, and Average total cost (ATC)
Fill in price of $50 and enter values of 0-13 for quantity. Use Excel functions to calculate TR and MR.
P
Q
TR
MR
TC
MC
Profit
ATC
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Calibri
26
X ✓ fx
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Draw Page Layout
く 11
A
B
C
D
G
H
Question 3: Profit Maximization for a Perfectly Competitive Firm (Parts a - g)
E
Answers:
B
TR =P*Q
MR = change in TR/ change in Q
MC = change in TC/ change in Q
Profit= TR - TC
Profit is max at Q, such that MR = MC.
Parts (a) - (c):
P
Q
Formulas
F
TR
Data
SV
You will complete the rest of table as specified in the following parts of this assignment.
b) Use Excel functions to calculate TC = 20 + 10*Q + 2*Q² and MC. Verify that MC = 10 + 4*Q.
1
c) Use Excel functions to calculate Profit = TR - TC.
2 d) Use the MAX function in Excel to find the highest profit this perfectly competitive firm can earn.
3 What is the profit-maximizing output? Verify that it satisfies the condition MR = MC.
4
5
6
MR
Av...
Review
TC
I
e) Use the MIN function in Excel to find the break-even price of this company.
f) Re-do the table you created in the previous parts if FC increases to $30.
Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d).
7 g) Re-do the table you created in the previous parts if the output price decreases to $42.
8
Compare the highest profit this firm is able to make and the profit-maximizing output level with those found in part (d).
9
20 Hints:
21
22
MC
View
Ev ab
Profit
J
a) Create a table with 15 rows and 8 columns.
Name the columns Price (P), Quantity (Q), Total revenue (TR), Marginal revenue (MR), Total cost (TC), Marginal cost (MC), Profit, and Average total cost (ATC)
Fill in price of $50 and enter values of 0-13 for quantity. Use Excel functions to calculate TR and MR.
P
Q
TR
MR
TC
MC
Profit
ATC
Automate Help
ATC
K
Merge ✓
L
General
+
M
Part (f):
P
Editing
Q
N
$
TR
LA
0
L
MR
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