ECON 202 - How much is the best level of output

Answer questions using table

TABLE

Fixed Variable Total Marginal

Output Cost Cost Cost AVC ATC Cost

1 $400

2 $700

3 $918

4 $1200

5 $1650

6 $2352

Given: Fixed cost =$1000; price=$550. Fill in table

On a piece of paper or something you can load up to the drop box, draw a graph of the demand, marginal revenue, ATC, AVC, and MC curves. The demand curve would be perfectly elastic and it would be the same as the Marginal Revenue Curve and equal to the price. The demand curve is a straight - horizontal line at the price of $550. This means that the seller can produce all that they wish but they only get the constant price.

How much is the best level of output?

Find total Profit.

State the minimum point of the ATC curve in dollars and cents.

State the minimum point of the AVC curve in dollars and cents.