# Microeconomics - demand, output and profit

• jalen
But, I think it would be a good idea to read your questions before you post them, because I don't see any problem with this one. However, I wouldn't be surprised if you were right, and there was a problem with it. It could be a problem with the wording, or the explanations, or the diagrams, or the way the questions are set up, or the way you have to calculate things. So it's not surprising that you might have to ask for help, but I think you will find that most people here are very helpful, and that you will be able to get the help that you need.In summary, this conversation discusses the concept of charge per basket and the corresponding number of baskets sold
jalen
\$ 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?

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.

## 1. What is the law of demand and how does it affect microeconomics?

The law of demand states that as the price of a product increases, the quantity demanded decreases, and vice versa. This is because consumers are willing to purchase more of a product at a lower price, and less of it at a higher price. In microeconomics, this law helps businesses understand how changes in price can impact their sales and revenue.

## 2. How does output affect profit in microeconomics?

In microeconomics, output refers to the quantity of goods or services produced by a business. The relationship between output and profit is known as the profit maximization principle. This principle states that businesses aim to produce the quantity of goods or services that will result in the highest possible profit. This is achieved by finding the equilibrium point where marginal revenue equals marginal cost.

## 3. What factors influence demand in microeconomics?

There are several factors that can influence demand in microeconomics, including price, consumer preferences, income, and the availability of substitutes. Price is often the most significant factor, as a change in price can directly impact the quantity demanded. Consumer preferences, such as trends and fads, can also influence demand for certain products. Additionally, changes in income can affect the purchasing power of consumers and their demand for goods and services.

## 4. How does elasticity of demand impact microeconomics?

Elasticity of demand refers to how responsive the quantity demanded is to changes in price. In microeconomics, the concept of elasticity helps businesses understand how sensitive consumers are to changes in price. If a product has a high price elasticity of demand, a small change in price can result in a significant change in quantity demanded. This can have a significant impact on a business's revenue and profit.

## 5. How do businesses determine the optimal price for their products in microeconomics?

Businesses use various strategies to determine the optimal price for their products in microeconomics. One common approach is to use cost-plus pricing, where the price is set by adding a markup to the cost of producing the product. Another method is value-based pricing, where the price is based on the perceived value of the product to the consumer. Businesses may also use competitive pricing, where the price is set based on the prices of similar products in the market.

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