5. Following are the cost and revenue data for tables produced by Peter's Patios Ltd.: If...
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5. Following are the cost and revenue data for tables produced by Peter's Patios Ltd.: If the company charges this price per table: Units of Fixed Output per Week Costs 0 $400 400 20 40 $38.00 33.50 29.00 24.50 20.00 15.50 11.00 The company's fixed costs and variable costs are shown in the following table. 60 80 100 400 400 400 400 400 It will sell this many tables per week: Variable Costs $0 180 330 0 20 40 60 80 $ 100 120 Average Cost Total Costs per Unit Average Marginal Marginal Revenue Revenue per Unit per Unit $ $ 430 560 780 120 1080 (a) Complete the 5 remaining columns in the table. (b) Draw the average cost per unit, marginal cost per unit, average revenue per unit, and marginal revenue per unit curves on the graph at the top of the following page. Cost per Unit (c) Use the graph in (b) above to determine the following: (i) The level of output at which profits will be maximized is. units per week. (ii) At this level of output, the level of profits will be $ per week. (Show your calculation of the level of profits.) $32 28 24 20 16 12 8 0 20 40 60 Output 80 100 120 (d) Is Peter's Patios Ltd. operating in a perfectly competitive market? If this firm is operating in a perfectly competitive industry and is a typical firm which is making profits, what adjustment will occur in the price of the product and the profits of this typical firm? What would be the final equilibrium level of the price? 5. Following are the cost and revenue data for tables produced by Peter's Patios Ltd.: If the company charges this price per table: Units of Fixed Output per Week Costs 0 $400 400 20 40 $38.00 33.50 29.00 24.50 20.00 15.50 11.00 The company's fixed costs and variable costs are shown in the following table. 60 80 100 400 400 400 400 400 It will sell this many tables per week: Variable Costs $0 180 330 0 20 40 60 80 $ 100 120 Average Cost Total Costs per Unit Average Marginal Marginal Revenue Revenue per Unit per Unit $ $ 430 560 780 120 1080 (a) Complete the 5 remaining columns in the table. (b) Draw the average cost per unit, marginal cost per unit, average revenue per unit, and marginal revenue per unit curves on the graph at the top of the following page. Cost per Unit (c) Use the graph in (b) above to determine the following: (i) The level of output at which profits will be maximized is. units per week. (ii) At this level of output, the level of profits will be $ per week. (Show your calculation of the level of profits.) $32 28 24 20 16 12 8 0 20 40 60 Output 80 100 120 (d) Is Peter's Patios Ltd. operating in a perfectly competitive market? If this firm is operating in a perfectly competitive industry and is a typical firm which is making profits, what adjustment will occur in the price of the product and the profits of this typical firm? What would be the final equilibrium level of the price?
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To complete the remaining columns in the table we can use the given data and formulas for average co... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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