- Using MS Excel or a table in MS Word, complete Table-1 (Joseph Farms, Inc., Cost and Revenue Data).
- Assume that the price is $165.
- Assume the fixed costs are $125, at an output level of 1.
- Assume that the data represents a firm in pure competition.
- Show your calculations.
- Explain the MC=MR Rule. Describe the market structures to which this rule applies.
- Create a chart to illustrate the data in Columns 9 and 10.
- Describe the profit maximizing (or loss minimizing) output for this firm. Explain why or why not there is an economic profit?
- Explain why a firm in pure competition is considered to be a “price taker.”
(Assignment continues below Table-1.)
Table-1: Joseph Farms, Inc., Cost and Revenue Data
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Column 1 |
Column 2 |
Column 3 |
Column 4 |
Column 5 |
Column 6 |
Column 7 |
Column 8 |
Column 9 |
Column 10 |
Column 11 |
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Output |
Price per unit |
Total Fixed Cost |
Total Variable Cost |
Total Cost |
Average Fixed Cost |
Average Variable Cost |
Average Total Cost |
Marginal |
Marginal Revenue |
Total Revenue |
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0 |
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$ – |
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NA |
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1 |
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$ 113.00 |
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2 |
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$ 213.00 |
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3 |
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$ 300.00 |
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4 |
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$ 375.00 |
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5 |
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$ 463.00 |
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6 |
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$ 563.00 |
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7 |
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$ 675.00 |
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8 |
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$ 813.00 |
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9 |
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$ 975.00 |
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10 |
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$ 1,163.00 |
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