ur answer, should the firm continue or stop the production? Justify. Output (Units) Total Revenue (RM) Average Cost (RM) Total Cost (RM) Marginal Cost (RM) Marginal Revenue (RM) 1 8.0 2 5.5 3 4.0 4 3.5 5 3.8 6 4.5
ur answer, should the firm continue or stop the production? Justify. Output (Units) Total Revenue (RM) Average Cost (RM) Total Cost (RM) Marginal Cost (RM) Marginal Revenue (RM) 1 8.0 2 5.5 3 4.0 4 3.5 5 3.8 6 4.5
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 9SQP
Related questions
Question
The table below shows the average cost (AC) for a purely competitive market. The average revenue (AR) is constant at RM5 per unit and the firm’s total fixed cost (TFC) is RM4.
If the average revenue falls to RM3 per unit, calculate the firm’s new profit or loss at the equilibrium. Based on your answer, should the firm continue or stop the production? Justify.
Output (Units) |
Total Revenue (RM) |
Average Cost (RM) |
Total Cost (RM) |
Marginal Cost (RM) |
Marginal Revenue (RM) |
1 |
|
8.0 |
|
|
|
2 |
|
5.5 |
|
|
|
3 |
|
4.0 |
|
|
|
4 |
|
3.5 |
|
|
|
5 |
|
3.8 |
|
|
|
6 |
|
4.5 |
|
|
|
7 |
|
6.0 |
|
|
|
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!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
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.Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:
9781337794992
Author:
William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning