Example Question - total revenue
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Cost Schedule Analysis of a Firm's Production
<p>(a) Total Variable Cost (TVC) is the cost of variable factors of production, which changes with the level of output. Since we only have Total Fixed Cost (TFC) and Marginal Cost (MC) in the table, we can calculate TVC by summing the MC for each additional unit of output.</p> <p>For 1 unit: TVC = 0 (since there is no additional cost for the first unit if no output is produced initially)</p> <p>For 2 units: TVC = 0 + 20 = 20</p> <p>For 3 units: TVC = 20 + 20 = 40</p> <p>For 4 units: TVC = 40 + 30 = 70</p> <p>Total Cost (TC) is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC).</p> <p>For 1 unit: TC = TFC + TVC = 20 + 0 = 20</p> <p>For 2 units: TC = TFC + TVC = 20 + 20 = 40</p> <p>For 3 units: TC = TFC + TVC = 20 + 40 = 60</p> <p>For 4 units: TC = TFC + TVC = 20 + 70 = 90</p> <p>(b) Total Revenue (TR) is calculated by multiplying the price per unit by the quantity of output.</p> <p>TR at $30 per unit:</p> <p>For 0 units: TR = 0 * 30 = 0</p> <p>For 1 unit: TR = 1 * 30 = 30</p> <p>For 2 units: TR = 2 * 30 = 60</p> <p>For 3 units: TR = 3 * 30 = 90</p> <p>For 4 units: TR = 4 * 30 = 120</p> <p>(c) Profit/Loss is calculated as Total Revenue (TR) minus Total Cost (TC).</p> <p>For 0 units: Profit/Loss = TR - TC = 0 - 20 = -20</p> <p>For 1 unit: Profit/Loss = 30 - 20 = 10</p> <p>For 2 units: Profit/Loss = 60 - 40 = 20</p> <p>For 3 units: Profit/Loss = 90 - 60 = 30</p> <p>For 4 units: Profit/Loss = 120 - 90 = 30</p> <p>(d) The firm is in equilibrium when marginal cost (MC) equals marginal revenue (MR), which in this case is the price of $30, as there is no information to calculate MR otherwise.</p> <p>Looking at the MC column, equilibrium is reached at an output level of 3 units (where MC for the next unit would exceed the price).</p> <p>(e) The time period of the firm's operation is not given in the question and cannot be determined from the information provided.</p>
Cost Schedule Analysis for a Firm
(a) To calculate the Total Variable Cost (TVC) and Total Cost (TC): <p></p> <p>TVC = Output \times Marginal Cost</p> <p>TC = Total Fixed Cost + TVC</p> <p>At output 1: TVC = 1 \times 10 = 10, TC = 20 + 10 = 30</p> <p>At output 2: TVC = 2 \times 20 = 40, TC = 20 + 40 = 60</p> <p>At output 3: TVC = 3 \times 30 = 90, TC = 20 + 90 = 110</p> <p>At output 4: TVC = 4 \times 40 = 160, TC = 20 + 160 = 180</p> <p></p> (b) To calculate the Total Revenue (TR) at each level of output if price is $30: <p></p> <p>TR = Price \times Output</p> <p>At output 1: TR = 30 \times 1 = 30</p> <p>At output 2: TR = 30 \times 2 = 60</p> <p>At output 3: TR = 30 \times 3 = 90</p> <p>At output 4: TR = 30 \times 4 = 120</p> <p></p> (c) To calculate the profit/loss at each level of output: <p></p> <p>Profit/Loss = TR - TC</p> <p>At output 1: Profit/Loss = 30 - 30 = 0</p> <p>At output 2: Profit/Loss = 60 - 60 = 0</p> <p>At output 3: Profit/Loss = 90 - 110 = -20 (loss)</p> <p>At output 4: Profit/Loss = 120 - 180 = -60 (loss)</p> <p></p> (d) The firm will be in equilibrium at the output level where TR = TC: <p></p> <p>At output 1 and 2 the TR equals TC, so the equilibrium price would be at output levels 1 and 2 if the price should remain at $30.</p> <p></p> (e) With the provided information, it's not possible to determine the time period of the firm's operation, as it requires additional business cycle data or context.
Economic Analysis of a Firm's Cost Schedule
<p>Total Variable Cost (TVC) is calculated by multiplying the output level by the Marginal Cost (MC) for each level of output. Total Cost (TC) is the sum of Total Fixed Cost (TFC) and Total Variable Cost (TVC) for each level of output.</p> <p>For an output of 1:</p> <p>\text{TVC} = \text{Output} \times \text{MC} = 1 \times 10 = 10</p> <p>\text{TC} = \text{TFC} + \text{TVC} = 20 + 10 = 30</p> <p>For an output of 2:</p> <p>\text{TVC} = \text{Output} \times \text{MC} = 2 \times 10 = 20</p> <p>\text{TC} = \text{TFC} + \text{TVC} = 20 + 20 = 40</p> <p>For an output of 3:</p> <p>\text{TVC} = \text{Output} \times \text{MC} = 3 \times 10 = 30</p> <p>\text{TC} = \text{TFC} + \text{TVC} = 20 + 30 = 50</p> <p>For an output of 4:</p> <p>\text{TVC} = \text{Output} \times \text{MC} = 4 \times 10 = 40</p> <p>\text{TC} = \text{TFC} + \text{TVC} = 20 + 40 = 60</p> <p>Total Revenue (TR) at a price of $30 for each level of output:</p> <p>\text{TR} = \text{Price} \times \text{Output}</p> <p>For an output of 1:</p> <p>\text{TR} = 30 \times 1 = 30</p> <p>For an output of 2:</p> <p>\text{TR} = 30 \times 2 = 60</p> <p>For an output of 3:</p> <p>\text{TR} = 30 \times 3 = 90</p> <p>For an output of 4:</p> <p>\text{TR} = 30 \times 4 = 120</p> <p>Profit/Loss at each level of output is calculated by subtracting Total Cost (TC) from Total Revenue (TR).</p> <p>For an output of 1:</p> <p>\text{Profit/Loss} = \text{TR} - \text{TC} = 30 - 30 = 0</p> <p>For an output of 2:</p> <p>\text{Profit/Loss} = \text{TR} - \text{TC} = 60 - 40 = 20</p> <p>For an output of 3:</p> <p>\text{Profit/Loss} = \text{TR} - \text{TC} = 90 - 50 = 40</p> <p>For an output of 4:</p> <p>\text{Profit/Loss} = \text{TR} - \text{TC} = 120 - 60 = 60</p> <p>The firm will be in equilibrium when Total Revenue (TR) equals Total Cost (TC), which occurs at an output level of 1:</p> <p>\text{TR} = \text{TC} = 30</p> <p>Since the question does not provide a time frame, we cannot determine the actual time period in which the firm is operating.</p>
Completing an Economic Table Involving Cost and Revenue
<p>\begin{align*} \text{Quantité (Q)} & \text{Coût fixe (CF)} & \text{Coût variable (CV)} & \text{Coût total (CT)} & \text{Coût marginal (Cm)} & \text{Recette totale (RT)} & \text{Recette marginale (Rm)} \\ 0 & 5 & 0 & 5 + 0 = 5 & - & 0 & - \\ 1 & 5 & 3 & 5 + 3 = 8 & 8 - 5 = 3 & 18 & 18 - 0 = 18 \\ 2 & 5 & 2 \times 3 = 6 & 5 + 6 = 11 & 11 - 8 = 3 & 2 \times 18 = 36 & 36 - 18 = 18 \\ 3 & 5 & 3 \times 3 = 9 & 5 + 9 = 14 & 14 - 11 = 3 & 3 \times 18 = 54 & 54 - 36 = 18 \\ 4 & 5 & 4 \times 3 = 12 & 5 + 12 = 17 & 17 - 14 = 3 & 4 \times 18 = 72 & 72 - 54 = 18 \\ 5 & 5 & 5 \times 3 = 15 & 5 + 15 = 20 & 20 - 17 = 3 & 5 \times 18 = 90 & 90 - 72 = 18 \\ \end{align*}</p>
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