Microeconomics Course Assignment

In fulfillment of Course ePortfolio and CSIS requirement

This Assignment is required and totals 50 points

Part 1 Perfect Competition Analysis

Total
Output/
hr
0
1
2
3
4
5
6
7
8
9
10
11

(TFC)
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10

(TVC)
$0
7
10
12
13
15
18
22
27
33
40
48

(TC)

(AFC)

(AVC)

(ATC)

(MC)

Market
Price
Perfect Total
Compet Revenu Total
ition
e
Profit
$5

(MR)

Part 2 Monopoly Profitability Analysis

Microeconomics Course Assignment

In fulfillment of Course ePortfolio and CSIS requirement

Part 2
Price
Total Per Unit
Output (Deman
Units
d)
0
$8.00
1
$7.80
2
$7.60
3
$7.40
4
$7.20
5
$7.00

(TR)

(TC)
10.00
14.00
17.50
20.75
23.80
26.70

(TP)

(ATC)

(MC)

(MR)

6
7
8
9
10
11
12

$6.80
$6.60
$6.40
$6.20
$6.00
$5.80
$5.60

29.50
32.25
35.10
38.30
42.70
48.70
57.70

Costs of Production and Profit Maximization Analysis

for the Perfect Competitive Market Structure

Total
Output/hr

Total
Fixed
Costs
(TFC)

0
1
2
3
4
5
6
7
8
9
10
11

$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10

Total
Total Averag
Variabl
Cost e Fixed
e Cost
(TC)
Cost
(TVC)
(AFC)
$0
10
0
7
17
10
10
20
5
12
22
3
13
23
3
15
25
2
18
28
2
22
32
1
27
37
1
33
43
1
40
50
1
48
58
1

Market
Averag Averag
Margin
Price
e
e Total
al Cost Perfect
Variabl Cost
(MC) Competiti
e Cost (ATC)
on
(AVC)
0
-$5
7
17.00
7
$5
5
10.00
3
$5
4
7.33
2
$5
3
5.75
1
$5
3
5.00
2
$5
3
4.67
3
$5
3
4.57
4
$5
3
4.63
5
$5
4
4.78
6
$5
4
5.00
7
$5
4
5.27
8
$5

Average Costs of Production

Production Costs

18
16
14
12

Average Total C os

10

Average Fixed C
(AFC )

Average Variable
(AVC )

8
6
4
2
0
1

6Output

10

11

12

(AVC )

6
4
2
0
1

Output

10

11

12

5
10
15
20
25
30
35
40
45
50
55

-12
-10
-7
-3
0
2
3
3
2
0
-3

5
5
5
5
5
5
5
5
5
5
5

Revenue and Costs

Total
Margin
Total
Revenu
al
Profit
e (TR)
Revenu
e (MR)
-0
-10

Marginal Cost =
Marginal Revenues

Profit Maximizat

70
60
50
40

Maximum Profit at Profit

Maximizing Output

30
20
10
0
1

Output
6
7

10 11 12

Total Cost of Production

Dollar Costs of Production

$70

$60

$50

Average Total C ost (ATC )

Average Fixed C ost
(AFC )
Average Variable C ost
(AVC )

$40

Total Fixed C osts

Total Variable C o
(TVC )
Total C ost (TC )

$30

$20
12

8
$10

(AVC )

$40

Total Fixed C osts

Total Variable C o
(TVC )
Total C ost (TC )

$30

$20
12

$10

$0
1

6
7
Output

10

11

12

Profit Maximization

tput
7

Total C ost (TC )

10 11 12

Total Fixed C osts (TFC )

Total Variable C ost
(TVC )
Total C ost (TC )

Price and Cost per Unit

Measuring Total Profits

18
16
14

Average Total C ost (ATC )

12
10

Marginal C ost (MC )

8
6

Marginal Revenue (MR)

4
2

10

Total Variable C ost

(TVC )
Total C ost (TC )

Total Fixed C osts (TFC )

14

Average Total C ost (ATC )

12
10

Marginal C ost (MC )

8
6

Marginal Revenue (MR)

4
2
0
1

6Output
7

12

11

10

11

12

C ost (ATC )

(MC )

enue (MR)

12

C ost (ATC )

(MC )

enue (MR)

13

Sheet3
Monopoly Profit Maximizing Analysis

P ric e , M a rg in a l R e v e n u e a n d C o s ts

Total
Price
Outpu Per Unit
Total
t
(Deman Revenue
Units
d)
(TR)
0
$8.00
0.00
1
$7.80
7.80
2
$7.60
15.20
3
$7.40
22.20
4
$7.20
28.80
5
$7.00
35.00
6
$6.80
40.80
7
$6.60
46.20
8
$6.40
51.20
9
$6.20
55.80
10
$6.00
60.00
11
$5.80
63.80
12
$5.60
67.20

Total
Costs
(TC)
10.00
14.00
17.50
20.75
23.80
26.70
29.50
32.25
35.10
38.30
42.70
48.70
57.70

Average
Total
Marginal
Costs
Marginal Revenue
(ATC)
Cost (MC)
(MR)

Total
Profit
(TP)
-10.00
-6.20
-2.30
1.45
5.00
8.30
11.30
13.95
16.10
17.50
17.30
15.10
9.50

14.00
8.75
6.92
5.95
5.34
4.92
4.61
4.39
4.26
4.27
4.43
4.81

4.00
3.50
3.25
3.05
2.90
2.80
2.75
2.85
3.20
4.40
6.00
9.00

7.80
7.40
7.00
6.60
6.20
5.80
5.40
5.00
4.60
4.20
3.80
3.40

Demand P
Demand Price

Monopoly Profit Determination

16.00
14.00
12.00

MC

10.00

Price Per Unit

(Demand)
Average Total Costs
(ATC)
Marginal Cost (MC)

Monopoly Profit

8.00
6.00
4.00

MR

2.00
0.00
0

10 11 12 13

Tota l Cos ts /Tota l Re ve nue

Output

TRComparison
Revenue-Cost
80.00
70.00

TC

60.00
50.00
40.00
30.00

Total Revenue
(TR)

Page 14

Average Total Cos

Sheet3

MC = MR

Price

osts

Page 15

80.00

Sheet3

70.00
60.00
50.00

Total Revenue
(TR)

40.00
30.00
20.00
10.00
0.00
1 2 3 4 5 6 7 8 9 10111213
Output

Page 16

Sheet3

Page 17