Scenario 14-1. A competitive firm sells its output for $20 per unit. When the firm produces 200 units of output,average variable cost is $16, marginal cost is $18, and average total cost is $23.15. Refer to Scenario 14-1. Calculate the firm’s total revenue, total cost, and profit at 200 units of output.Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter’s demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter’s ice cream buys a double scoop cone because it’s so delicious.)QuantityPriceMRMCATC20$5.60$5.20$2.20$2.0540$5.20$4.40$2.40$2.1060$4.80$3.60$2.60$2.1580$4.40$2.80$2.80$2.20100$4.00$2.00$3.00$2.25120$3.60$1.20$3.20$2.30140$3.20$0.40$3.40$2.35160$2.80-$0.40$3.60$2.40180$2.40-$1.20$3.80$2.455. Refer to Scenario 16-3. When Peter maximizes his profits, what is his total cost per day?

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Asked Dec 3, 2019
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Scenario 14-1. A competitive firm sells its output for $20 per unit. When the firm produces 200 units of output,

average variable cost is $16, marginal cost is $18, and average total cost is $23.
15. Refer to Scenario 14-1. Calculate the firm’s total revenue, total cost, and profit at 200 units of output.

Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter’s demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter’s ice cream buys a double scoop cone because it’s so delicious.)

Quantity

Price

MR

MC

ATC

20

$5.60

$5.20

$2.20

$2.05

40

$5.20

$4.40

$2.40

$2.10

60

$4.80

$3.60

$2.60

$2.15

80

$4.40

$2.80

$2.80

$2.20

100

$4.00

$2.00

$3.00

$2.25

120

$3.60

$1.20

$3.20

$2.30

140

$3.20

$0.40

$3.40

$2.35

160

$2.80

-$0.40

$3.60

$2.40

180

$2.40

-$1.20

$3.80

$2.45

5. Refer to Scenario 16-3. When Peter maximizes his profits, what is his total cost per day?

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Expert Answer

Step 1

15.

The competitive firm sells 200 units of output and the average variable cost of the firm is given to be $16. The marginal cost is given to be $18 and the average total cost is given to be $23. It is also given that the price that the firm receives from selling a unit of output is equal to $20. The total revenue of the firm from selling 200 units of output can be calculated by multiplying the output with the per unit price as follows:

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Total Revenue Output x Price -200x20 =4,000

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Step 2

The total cost of the firm can be calculated by multiplying the output with the average total cost of production. The average total cost of production is given to be $23 per unit and thus, the total cost of the firm can be calculated as follows:

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Total Cost Outputx Average Total Cost 200x23 =4,600

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Step 3

The profit is the excess revenue made by the firm after deducting the cost of production from the total revenue. The total revenue i...

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Profit Total Revenue - Total Cost -4,000-4,600 =-600

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