M3A2

1. Table 1 Column1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 | Column 7 | Column 8 | Column 9 | Column 10 | Column 11 | Output | Price per unit | Total Fixed Cost | Total Variable Cost | Total Cost | Average Fixed Cost | Average Variable Cost | Average Total Cost | Marginal | Marginal Revenue | Total Revenue | Level | | | | | | | | Cost | | | 0 | 165 | 125 | $ - | $165.00 | NA | | $165.00 | | 1 | $165.00 | $125.00 | $113.00 | $238.00 | $125.00 | $113.00 | $238.00 | $73.00 | $165.00 | $165.00 | 2 | $165.00 | $125.00 | $213.00 | $338.00 | $62.50 | $106.50 | $169.00 | $100.00 | $165.00 | $330.00 | 3 | $165.00 | $125.00 | $300.00 | $425.00 | $41.67 | $100.00 | $141.67 | $87.00 | $165.00 | $495.00 | 4 | $165.00 | $125.00 | $375.00 | $500.00 | $31.25 | $93.75 | $125.00 | $75.00 | $165.00 | $660.00 | 5 | $165.00 | $125.00 | $463.00 | $588.00 | $25.00 | $92.60 | $117.60 | $88.00 | $165.00 | $825.00 | 6 | $165.00 | $125.00 | $563.00 | $688.00 | $20.83 | $93.83 | $114.67 | $100.00 | $165.00 | $990.00 | 7 | $165.00 | $125.00 | $675.00 | $800.00 | $17.86 | $96.43 | $114.29 | $112.00 | $165.00 | $1,155.00 | 8 | $165.00 | $125.00 | $813.00 | $938.00 | $15.63 | $101.63 | $117.25 | $138.00 | $165.00 | $1,320.00 | 9 | $165.00 | $125.00 | $975.00 | $1,100.00 | $13.89 | $108.33 | $122.20 | $162.00 | $165.00 | $1,485.00 | 10 | $165.00 | $125.00 | $1,163.00 | $1,288.00 | $12.50 | $116.30 | $128.80 | $188.00 | $165.00 | $1,650.00 |
Total Cost = Total Fixed Cost + Total Variable Cost
Average Fixed Cost = Total Fixed Cost/Output Quantity
Average Variable Cost = Total Variable Cost/Output Quantity
Average Total Cost = Total Cost/Output Quantity
Marginal Cost = ∆ in Total Cost/∆ in Output Quantity
Marginal Revenue = ∆ in Total Revenue that results from selling 1 more unit of output.
Total Revenue = Price x Quantity Output (McConnell, 2010)
2. The MC=MR rule is “The principle that a firm will maximize its profit