Suppose a firm produces the following quantities of a good, with the corresponding total fixed cost, total variable cost, and total cost:
| Quantity | Total Fixed Cost (TFC) | Total Variable Cost (TVC) | Total Cost (TC) | | --- | --- | --- | --- | | 0 | $100 | $0 | $100 | | 1 | $100 | $50 | $150 | | 2 | $100 | $90 | $190 | | 3 | $100 | $130 | $230 | | 4 | $100 | $170 | $270 | unit 3 microeconomics lesson 5 activity 37 answer key
When using this answer key, be aware of three frequent mistakes: Suppose a firm produces the following quantities of
At P=$25, what is the best output? Answer: Q = 5 (still where MR ≥ MC, even though MR=$25 and MC=$45 at Q=6). The following is based on the standard 15th/16th
Note: Activity numbers and data tables vary slightly between workbook editions. The following is based on the standard 15th/16th edition of the "Macroeconomics & Microeconomics" student workbook.
and incurs a loss, it may require a government subsidy equal to that loss to stay in business.