What is relationship between total revenue (TR) and total variable cost (VC) if the price is less than AVC (is TR greater, less, or equal to VC)?

Answered: Image /qna-images/answer/8318d948-f6a0-49ea-a31c-dae63cd59963.jpg

Answered: total revenue (TR) and total variable…

Business

Economics

total revenue (TR) and total variable cost

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 1QR

See similar textbooks

Related questions

Q: On the following graph, plot the three SRATC curves for Ike's Bikes from the previous table.…

A: If it is producing Q=100 bikes in one factory, then its short-run ATC = $440. In the long run, the…

Q: Determine whether it is true or false The difference between economic profit and accounting profit…

A: According to given question In simple words economic profit is gradually referred to as in general…

Q: what is the minimum value of avc & mc B. Function or expression of TVC, AVC, AFC, ATC and MC

A: TC= 13q3-2q2+60q+100

Q: Average total cost, average variable cost marginal cost and marginal product b. The relationship…

A: Average Total Cost or Average Cost is the total cost (TC) divided by the number of units produced…

Q: The total cost of producing 25 tons of butter is 45000. If the average variable cost is $775, then…

A: TC(Total) is the cost which is incurred by a firm in producing some specific level of output. It is…

Q: Find total fixed cost if average fixed cost is $30 and output is 11

A: The information being given is:- Average fixed cost = $30 Output = 11 units We have to calculate…

Q: Solve the attachment.

A: The firms incur costs as per their production processes and other requirements to maintain and make…

Q: ATC is decreasing, is ATC is above (greater), equal, or less (below) than MC? ________ choose one…

Q: Draw an example of the Total Fixed Cost, Total Variable Cost, and Total Cost of a company whose…

A: Total Cost: The term total cost refers to the sum of all the costs that are used in the production…

Q: Jane's Juice Bar has the following cost schedules: In the following table, complete the marginal…

A: Total cost is the total expenditure done by the producer on the production process. Total cost…

Q: The marginal cost curve: is a vertical line. generally rises at first and then declines as output…

A: Marginal cost is the cost of producing additional unit of output. The shape of marginal cost depends…

Q: total revenue (TR) and total cost (TC) if

A: If price is equal to AC then at this situation TR= TC ( since TR=AC×Q and TC=AC×Q )

Q: A firm pays $500,000 per year on costs that it cannot alter in the short run. This year, it expects…

A: Cost Cost refers to any expense that incur in the process of production. Total cost is made up of…

Q: Tom, the only steel drum manufacturer in Narnia, can sell a single drum for $30. However, for every…

A: Here we calculate the output , price and Profit or loss by using the given information ,and fill the…

Q: When the marginal product of labor diminishes average fixed cost rises average variable cost is…

A: Marginal product of labor is the additional output produced by employing an additional unit of…

Q: Carolyn knows average total cost and average variable cost for a given level of output. Which of…

A: TC is Given AVC is Given Output Is given

Q: total revenue (TR) and total variable cost (VC) if the price is equal to the AVC

A: Relationship between TR and TVC 1. TR represents sum of MR and TVC represents Sum of MC Gross…

Q: Where Q = quantity, TC = total cost, TFC = total fixed cost, and TVC = total variable cost; average…

A: The average variable cost is the total variable cost per unit of output. The total variable cost is…

Q: List and explain which of the following is a fixed cost or a variable cost for Caribbean Airlines.…

A: Total fixed costs are the total obligations of the firm per time period for all fixed inputs. Total…

Q: On the following graph, plot the three SRATC curves for Ike's Bikes from the previous table.…

A: Average Total Cost: Average total cost determines how much of a company's total costs are contained…

Q: At level of output, average fixed costs = $20, average variable costs $900. Given this information,…

A: Usually in the easy language we can call Average fixed cost as the cost which is gradually required…

Q: Graphically show the relationship between the Avg. Variable Cost, Avg. Total Cost, and Marginal Cost…

A: Below is the formula: AVC = TVCQATC = TCQMC = TCn - TCn-1

Q: 800 Is 720 640 SRATC, 560 480 SRATC, 400 320 SRATC, 240 160 LRATC 80 100 200 300 400 500 600 700…

Q: The average variable cost curve and average total cost curve tend to converge as output rises…

A: ATC = TC/Q AFC = TFC/Q AVC = TVC/Q TC = TFC + TVC TFC = TC – TVC AFC = AC - AVC

Q: Which of the following statements are true according to the previous graph? Check all that apply.…

A: Total cost is the sum of all costs incurred in the production process. The total cost can be divided…

Q: Joel hires students to sell magazine subscriptions at $450 per student per week. He leases equipment…

A: Total cost is the sum of Fixed cost and variable cost. Fixed cost remains same at all levels of…

Q: What effect might a decrease in the demand for high definition television have on the short-run…

Q: State the relationship between AVC and AP (average product)

A: Average product (AP): Average product can be find by dividing TP / TVF. Where, TP is total product…

Q: The Mini-Case "Economies of Scale at Google" describes economies of scale for Google Cloud Storage.…

A: The objective of the following assessment is to evaluate the marginal cost and average cost for the…

Q: how do you know the total variable is 50 when finding the total fixed cost

A: TC = AC * Q ------------------- MC is a change in TC due to changing quantity by one unit. MCn =…

Q: (TC is total cost; VC is variable cost; Q is quantity.) ATC а. b. The amount by which total cost…

A: A -Change in TC dur to change in output is called MARGINAL COST B- AMOUNT by which total cost…

Q: You are given the following cost functions: TC=100+60Q−3Q2+0.1Q3TC=100+60Q−3Q2+0.1Q3…

A: Total cost (TC): It is the sum total of the cost that is being borne by the producer in the process…

Q: Refer to the figure below:

A: The given graph shows the consumption and the investment in different years and in some years the…

Q: ABC company's total cost when it produces 20 units is $100. ABC's total cost is $120 when it…

A: Total cost is the expenditure incurred in the production of goods and services. It is the cost that…

Q: Scott owns a law-enforcement training operation in Boise, Idaho. He employs three trainers. The last…

A: Scott's total cost increased by $466 because of hiring the last trainer who brought in one new…

Q: 3. XYZ corporation produces widgets. Its short-run marginal cost curve is given by MC (q) = 10 – 5q…

A: Given information MC=10-5q+q^2 Marginal cost is the additional cost incurred by producing additional…

Q: Water World Water Park has the following cost function: TC = 500 + 125q and MC = 125 a) Determine…

A: Given: TC = 500 + 125q MC = 125

Q: Consider a linear, increasing function for total costs. If there are fixed costs, which one of the…

A: Answer: A (Marginal cost is always falling) Explanation: The marginal cost will be constant in the…

Q: What is relationship between total revenue (TR) and total variable cost (VC) if the price is between…

A: Total revenue refers to the revenue of a firm through its total sale of goods. The cost incurred in…

Q: Q15 _____ cost declines over the whole range of output. a. Average variable. b. Total variable. c.…

A: Total fixed cost (TFC): - it is the cost incurred on the fixed capital assets like land, building,…

Q: State whether the following describes MC (marginal cost), ATC (average total cost), AVC (average…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: A firm is producing 1,000 units at a total cost of $5,000. If it were to increase production to…

A: The total cost is the sum of fixed cost and variable cost. The fixed cost is the cost of fixed…

Question

What is relationship between total revenue (TR) and total variable cost (VC) if the price is less than AVC (is TR greater, less, or equal to VC)?

Definition Definition Measure of the cost of production per unit of output, including only variable costs such as wages, materials, and utilities. AVC is calculated by dividing total variable cost by the number of units produced. Understanding average variable cost is important for businesses to make decisions on pricing, production levels, and profitability.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

What is relationship between total revenue (TR) and total variable cost (VC) if the price is equal to the AVC (tangent to the minimum AVC), (is TR greater, less, or equal to VC)? What do we call this point?
What is relationship between total revenue (TR) and total cost (TC) if the price is equal (tangent to the minimum) to ATC (is TR greater, less, or equal to TC)? What do we call this point?
What effect might a decrease in the demand for high definition televisions have on the short-run average total costcurve for this product?
A company is planning to manufactureand market a new two-slice electric toaster. After conducting extensive market surveys, the research department provides the following estimates: a weekly demand of 200 toasters at a price of $16 per toaster and a weekly demandof 300 toasters at a price of $14 per toaster. The financial department estimates that weekly fixed costs will be $1,400and variable costs (cost per unit) will be $4. a)Assume that the relationship between price ? and demand ? is linear. Use the research department’s estimates to express ? as a function of ? and determine the domain of the function. b)Using your knowledge from Finite Math, determine the Revenue functionin terms of ?. c)Determine the Marginal Revenu eat 2 different production levelsfor example 350 and 600 units. Interpret these results.(HINT: Consider what a positive or negative first derivative implies) d)Assume that the cost function is linear. Use the financialdepartment’s estimates to express the cost…
Explain the concept of total revenue and total cost
What is the total revenue when output is 1, total cost is 35, marginal cost is 10, fixed cost is 25, average cost is 35.
Is this graph a valid set of cost curves? True/False