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| | Yc=A+BX | straight line equation. |
| | TC | Qsold | Qproduced | Qdemanded | price | labor | investment | income | Expenses | coefficient |
| Qtr 1 | $4,415,000 | 499,999 | 499,999 | 549,425 | $9.25 | 50,000 | 5 | $20,000 | $150,000 | $0.30 |
| Qtr 2 | $5,186,644 | 587,236 | 587,236 | 714,993 | $9.25 | 60,000 | 5 | $20,600 | $150,000 | $0.26 |
| Qtr 3 | $5,174,189 | 548,667 | 647,480 | 548,667 | $9.75 | 70,000 | 5 | $21,000 | $125,000 | $0.19 |
| Qtr 4 | $7,282,201 | 766,297 | 667,484 | 833,521 | $9.65 | 75,000 | 5 | $21,200 | $200,000 | $0.30 |
| Qtr 5 | $7,630,401 | 811,784 | 811,764 | 860,747 | $9.90 | 85,000 | 6 | $21,400 | $200,000 | $0.25 |
| Qtr 6 | $6,971,144 | 697,396 | 828,822 | 697,396 | $10.25 | 95,000 | 6 | $22,000 | $150,000 | $0.18 |
| Qtr 7 | $7,915,228 | 715,182 | 829,046 | 829,046 | $11.50 | 100,000 | 6 | $21,600 | $325,000 | $0.39 |
| Qtr 8 | $6,901,834 | 764,199 | 769,903 | 769,903 | $10.00 | 75,000 | 6 | $21,600 | $150,000 | $0.19 |
| Qtr 9 | $7,719,569 | 811,784 | 811,784 | 811,784 | $10.05 | 85,000 | 6 | $21,600 | $225,000 | $0.28 |
| Qtr 10 | $4,011,162 | 425,280 | 656,281 | 656,281 | $10.75 | 60,000 | 6 | $21,200 | $125,000 | $0.19 |
| Qtr 11 | $8,688,700 | 744,619 | 829,046 | 829,046 | $11.76 | 100,000 | 6 | $22,000 | $400,000 | $0.48 |
| Qtr 12 | $8,780,822 | 673,009 | 1,106,471 | 1,103,171 | $12.35 | 140,000 | 8 | $22,000 | $400,000 | $0.36 |
| | | | | | | | | | sum of co. | $3.37 |
| | | | | | | | | | average co. | $0.28 |
| question one |
| TC=labor+ unit produced*cost per unit |
| TC=labor +unit produced(expenses/ unit produced) |
| therefore cost function is given by: |
| TC= 50000 + 499999(150000/499999) |
| TC = 50000 + 499999(0.30) |
| question two |
| total income= 60000*9.25 |
| $555,000 |
| Total Cost = 60000 + 60000 * 0.28 = 78,800 |
| Average cost = total cost / unit produced |
| so, Average Cost = 78800/60000 = $1.31/unit |
| and |
| Marginal cost (or revenue or profit) is the instantaneous |
| rate of change of cost (or revenue or profit) relative to |
| production at a given production level |
| Marginal Cost= C'(x+1) - C(x) |
| Question Three |
| According to the results obtained in question two the firm is operationg |
| at profit although they are not fully exploiting their potential. |
| in my view I would recoment the company management to ensure they start |
| a process of increasing their production so that they can get a better |
| competive advantage and exploit the available market opportunities fully. |
| By doing so they will be on the safe side of their operations. |
| question Four |
| total income= 70000*9.25 |
| | $647,500 |
| TC=70000+ 70000*0.28 |
| $19,600 |
| The second manufacturer is doing better as compared to the first one. However he is not enjoying |
| economies of scale. The manufacturer should increase his production so that he can maximise his |
| profitability. |
avbhi
solution_by_dovecy13.xls
