Microeconomics - demand, output and profit

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Discussion Overview

The discussion revolves around a microeconomics problem involving demand, output, and profit calculations based on a provided table of data. Participants are attempting to analyze the relationships between various economic variables and clarify the calculations needed to determine output and profit levels.

Discussion Character

  • Homework-related
  • Mathematical reasoning
  • Technical explanation
  • Debate/contested

Main Points Raised

  • One participant presents a table with price per basket and corresponding quantities sold, along with various cost and revenue calculations.
  • Another participant questions the intent of the original post, suggesting that the forum is not meant for completing homework without effort from the poster.
  • A participant provides definitions for the abbreviations used in the table and shares equations for calculating total cost, average variable cost, average cost, marginal cost, total revenue, marginal revenue, and profit.
  • Concerns are raised about the accuracy of the total revenue calculations, with one participant suggesting that the original calculations may have incorrectly used a formula involving Q² instead of P x Q.
  • A participant expresses uncertainty about the output and profit calculations, asking for guidance on which equations to use to find these values.
  • Another participant humorously comments on their background as an engineer, implying a lack of confidence in economic analysis.
  • Further humor is shared regarding the engineering perspective in relation to economics, referencing a well-known phrase about needing more power.

Areas of Agreement / Disagreement

There is no consensus on the accuracy of the calculations presented, and multiple viewpoints regarding the interpretation of the data and formulas remain. Participants express differing levels of confidence in their understanding of the economic concepts involved.

Contextual Notes

Some calculations are noted as potentially incorrect, particularly in the total revenue column, which may affect subsequent profit calculations. The discussion includes unresolved questions about the correct application of economic formulas.

Who May Find This Useful

Students studying microeconomics, individuals interested in demand and profit analysis, and those seeking clarification on economic calculations may find this discussion relevant.

jalen
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charge per basket....baskets sold per week
$ 27............0
24............5
21............15
18............30
15............50
12............75
9............105

Q...FC...VC...TC...AVC...AC...MC...TR...MR...Profit
0...50...0
5...50...50
15...50...125
30...50...225
50...50...350
75...50...500
105...50...750

How much output will be produced?
What is the profit at this level?
 
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It is unlikely that anyone will do your homework for you unless you are paying them for it. That isn't the purpose of these forums. Please show some work and identify where you are struggling with the concepts so that people here can help clarify the points that are difficult for you.

Also, please identify the abbreviations in the table, I only recognize a few.
 
Q:quantity, FC:fixed cost, VC:variable cost, TC:total cost, AVC:average variable cost, AC:average cost, MC:marginal cost, TR:total revenue, MR:marginal revenue

TC=FC+VC...AVC=VC/Q...AC=TC/Q...MC=delta(TC)/delta(Q)...TR=P x Q
MR=delta(R)/delta(TR)
...delta(Q)
Profit=TR-TC

Based on these equations these are the answers I got...

Q...FC...VC...TC...AVC...AC...*MC...TR...*MR...Profit
0...50...0...50...---...---...10...---...20...----
5...50...50...100...10...20...7.5...600...11.67...500
15...50...125...175...8.3...11.67...---...4725...---...4550

*MC and MR numbers are on the "line" between 0,5 and 5,15
 
Everything looks good until the total revenue column. The formula is TR = P Q, but the numbers you have here look like you calculated P Q². I cannot evaluate your MR column since I don't have the formula for R which is in the formula for MR. Your Profit column is correctly calculated based on your incorrect TR column, but you will have to re-calculate Profit once you fix TR.
 
I think my calculations are correct now (if I plug it into my calc correctly lol). After these calculations what equation(s) should I use to find a)How much output will be produced? b)What is the profit at this level? Or is the answer from the above calculations?
 
Profit is obviously the column labeled "Profit". I would guess that output = Q, but take that guess with a grain of salt. I am an engineer, not an economist!
 
"I am an engineer, not an economist!"
Scottie! We need more power...
 
MichaelXY said:
"I am an engineer, not an economist!"
Scottie! We need more power...

That's what we've all been saying to Gordon Brown and he is an economist.
 

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