Bags/Participants Fixed Cost Variable Cost Total Cost 0. $1,700 $- $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 $1,700 $5,200 $6,900 400 $1,700 $9,000 $10,700 500 $1,700 $15,000 $16,700 600 $1,700 $23,800 $25,500 700 $36,800 $38,500 $1,700 800 $57,500 $1,700 $55,800 900 $83,000 $84,700 $1,700 1,000 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? Please select any/all correct answers: V Using Qb = F/(MR - AVC) where Qb is the break even quantity, the event would break even at 283 bags. O Using the profit-maximizing rule, MR 2 MC, the quantity of bags that will maximize profits is 200 bags. O Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags. O The break even quantity cannot be determined in this case.
Bags/Participants Fixed Cost Variable Cost Total Cost 0. $1,700 $- $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 $1,700 $5,200 $6,900 400 $1,700 $9,000 $10,700 500 $1,700 $15,000 $16,700 600 $1,700 $23,800 $25,500 700 $36,800 $38,500 $1,700 800 $57,500 $1,700 $55,800 900 $83,000 $84,700 $1,700 1,000 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? Please select any/all correct answers: V Using Qb = F/(MR - AVC) where Qb is the break even quantity, the event would break even at 283 bags. O Using the profit-maximizing rule, MR 2 MC, the quantity of bags that will maximize profits is 200 bags. O Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags. O The break even quantity cannot be determined in this case.
Chapter4: Economic Evaluation In Health Care
Section: Chapter Questions
Problem 7QAP
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Transcribed Image Text:Bags/Participants
Fixed Cost
Variable Cost
Total Cost
$1,700
$-
$1,700
100
$1,700
$500
$2,200
200
$1,700
इ1,200
$2,900
$1,700
$2,700
$4,400
300
$1,700
$5,200
$6,900
400
$1,700
$9,000
$10,700
500
$16,700
$1,700
$15,000
600
$1,700
$23,800
$25,500
700
$36,800
$38,500
$1,700
800
$55,800
$57,500
$1,700
900
$84,700
$83,000
$1,700
1,000
Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags
will profits be maximized?
Please select any/all correct answers:
Using Qb = F/(MR - AVC) where Qb is the break even quantity, the event would break even at 283 bags.
%3D
O Using the profit-maximizing rule, MR 2 MC, the quantity of bags that will maximize profits is 200 bags.
O Using the profit-maximizing rule, MR > MC, the quantity of bags that will maximize profits is 300 bags.
O The break even quantity cannot be determined in this case.
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At breakeven point there is no profit or loss. At breakeven point, total revenue is equal to total cost.
A firm earns maximum profit by producing output at a level where MR = MC. MR refers to Marginal Revenue. MR is the additional revenue earned by producing an additional unit of output. MC refers to Mraginal Cost. Marginal Cost is the additional cost incurred while producing an additional unit of output.
MR = Change in Total Revenue / Change in Quantity
MC = Change in Total Cost / Change in Quantity
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