Explanation The summation of the revenues from the sale of individual units of output by the firm is known as the total revenue of the firm whereas the summation of the costs incurred in producing the individual units of output by the firm is known as the total cost of the firm. The difference between the total revenue and the total cost is known as the total profit of the firm which can be defined as the excess revenue of the firm after deducting the total cost incurred in production. The table given below shows the different quantities of output that the farmer produces and the price of the per bushel wheat. The table is as follows: Quantity Bushels (Q) Total Revenue (TR) Total Cost (TC) Profit (TR - TC) Marginal Revenue (MR) Marginal Cost (MC) 0 $0.00 $10.00 -$10.00 - - 1 7.00 14.00 -7.00 $7.00 $4.00 2 14.00 16.50 -2.50 $7.00 2.50 3 21.00 18.50 2.50 $7.00 2.00 4 28.00 21.00 7.00 $7.00 2.50 5 35.00 24.50 10.50 $7.00 3.50 6 42.00 29.00 13.00 $7.00 4.50 7 49.00 35.50 13.50 $7.00 6.50 8 56.00 44.50 11.50 $7.00 9.00 9 63.00 56.50 6.50 $7.00 12.00 10 70.00 72.00 -2.00 $7.00 15.50 Here, the cost of the firm at the point of zero output is $10. This means that the variable cost is absent and thus the fixed cost of the firm is $10...

Economics, Student Value Edition (6th Edition)

6th Edition

ISBN: 9780134123851

Author: Hubbard, R. Glenn; O'Brien, Anthony Patrick

Publisher: PEARSON

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Question

Chapter 12, Problem 12.2.8PA

To determine

Quantity of wheat that the farmer sells and profit that the farmer makes at price of $7 per bushel but Fixed cost increases by $10.

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Chapter 12, Problem 12.2.7PA

Chapter 12, Problem 12.3.1RQ

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Chapter 12 Solutions

Economics, Student Value Edition (6th Edition)

Ch. 12 - Prob. 12.1.1RQ Ch. 12 - Prob. 12.1.2RQ Ch. 12 - Prob. 12.1.3RQ Ch. 12 - Prob. 12.1.4PA Ch. 12 - Prob. 12.1.5PA Ch. 12 - Prob. 12.1.6PA Ch. 12 - Prob. 12.1.7PA Ch. 12 - Prob. 12.1.8PA Ch. 12 - Prob. 12.2.1RQ Ch. 12 - Prob. 12.2.2RQ

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Quantity of wheat that the farmer sells and profit that the farmer makes at price of $7 per bushel but Fixed cost increases by $10.

Solution Summary: The author explains the difference between total revenue and total cost, which can be defined as the excess revenue of the firm after deducting the total costs incurred in production. The table shows the different quantities of output that the farmer produces and

Quantity of wheat that the farmer sells and profit that the farmer makes at price of $7 per bushel but Fixed cost increases by $10.

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Chapter 12 Solutions