Using the spread sheet data below complete the following steps:
a) A graph that compares: MC, ATC, AVC, AFC. Title this graph: Average Costs of Production. Be certain to appropriately label axis (10p
b) A graph that compares: TC, TVC, TFC. Title this graph: Total Costs of Production. Be certain to appropriately label axis (10pt font)
c) A graph that compares: TR with TC. Title this graph: Profit Maximization. Using the data spreadsheet determine what level of produc
most profitable. Insert a colored, vertical line that indicates this Profit Maximizing point. Shadow the line. Be certain to appropriately label a
font)
d) A graph that compares: ATC, MC, and MR. Title this graph: Measuring Total Profits. Insert a colored, shadowed, vertical line indicatin
level of production total profits are the greatest. Align this graph (d) under graph (c) at the appropriate profit maximizing production level.
Be certain to appropriately label the axis (10pt font)
e) On the completed spreadsheet data: high light (color) the entire row showing the proift maxizing level of production
f) On (e) above: Insert (arrowhead lines) indicating where MC = MR. Connect these arrows to a side-bar label: Marginal Costs = Margi
Revenue.
g) On (e) above: Insert (arrowhead lines) indicating where Maximum Profit at profit maximizing output. Connect these arrows to a side-b
Maximum Profit at Profit Maximizing Output.
h) Each grpah should include the use of (gradient, texture, and shape effects (preset 2)) of your choice. Most will be found under the tab: C
Format, and Layout.
i) Insert a (Text Box) and answer the following questions:
1. Explain in your own words why MC=MR is a profit maximizing production level ?
2. Assume prices dropped to $4.25. What then would be the profit maximizing or loss minimizing level of production ?
3. Should the firm continue to operate at this point?
h) Each grpah should include the use of (gradient, texture, and shape effects (preset 2)) of your choice. Most will be found under the tab: C
Format, and Layout.
i) Insert a (Text Box) and answer the following questions:
1. Explain in your own words why MC=MR is a profit maximizing production level ?
2. Assume prices dropped to $4.25. What then would be the profit maximizing or loss minimizing level of production ?
3. Should the firm continue to operate at this point?
Total
Output/hr
0
1
2
3
4
5
6
7
8
9
10
11
(TFC)
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
(TVC)
$0
7
10
12
13
15
18
22
27
33
40
48
(TC)
(AFC)
(AVC)
(ATC)
(MC)
Market
Price
Perfect
Competiti
Total
on
Revenue
$5
Total
Profit
(MR)
a) A graph that compares: Price/Unit Demand, Marginal Cost, Marginal Revenue, and Average Total Costs. Title this graph: Monopoly Pr
Determination. Be certain to appropriately label axis (14pt font)
b) Add to graph(a): colored dashed lines indicating (1) most profitable price level, (2) profit maximizing output, (3) ATC level. Also indicat
of monopoly profitablility" by typing the words Monopoly Profit
c) Add to graph(a): arrows indicating Demand Price juncture, MC=MR, Average Total Costs. Connect these arrows to side-bar labels for ea
d) A graph that compares: TR with TC. Title this graph: Revenue - Cost Comparison. Be certain to appropriately label axis as well as T
curves. (14pt font)
e) On the completed spreadsheet data: high light (color) the entire row(s) showing the proift maxizing level (range) of production
f) Each grpah should include the use of (gradient, texture, and shape effects (preset 2)) of your choice. Most will be found under the tab: C
Format, and Layout.
g) Insert a (Text Box) and answer the following question:
1. Explain in your own words why MC=MR is a profit maximizing production level for the Monopoly
2. Explain how the monoploist determines where to price his product
3. A monopoly is considered an inefficient use of resources for what two reasons?
Part 2
Total
Output
Units
0
1
2
3
4
5
6
7
8
9
10
11
12
Price Per
Unit
(Demand)
$8.00
$7.80
$7.60
$7.40
$7.20
$7.00
$6.80
$6.60
$6.40
$6.20
$6.00
$5.80
$5.60
(TR)
(TC)
10.00
14.00
17.50
20.75
23.80
26.70
29.50
32.25
35.10
38.30
42.70
48.70
57.70
(TP)
(ATC)
(MC)
(MR)
Structure
nd centered.
indicating at what
on level.
= Marginal
o a side-bar label:
opoly Profit
on
the tab: Chart Tools,
Total
Output/hr
0
1
2
3
4
5
6
7
8
9
10
11
Total
Fixed
Costs
(TFC)
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
$10
Total
Varible
Costs
(TVC)
$0
7
10
12
13
15
18
22
27
33
40
48
18
16
14
12
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9 1011
Output
Profit Maximiation
$70.00
$60.00
$50.00
$40.00
Total Cost/T
otal Revenue
$30.00
$20.00
$10.00
$0.00
1
10 11 12
$50.00
$40.00
Total Cost/T
otal Revenue
$30.00
$20.00
$10.00
$0.00
1
Output
10 11 12
Market Price
Perfect
Total
Competition Revenue
$5
$0
$5
$5
$5
$10
$5
$15
$5
$20
$5
$25
$5
$30
$5
$35
$5
$40
$5
$45
$5
$50
$5
$55
Total
Profit
($10)
($12)
($10)
($7)
($3)
$0
$2
$3
$3
$2
$0
($3)
Marginal
Revenue
(MR)
Marginal Costs = Marginal Revenue
5
5
5
5
5
5
5
5
5
5
5
$70
$60
$50
$40
Dollar Cost
$30
$20
$10
$0
10 11 12
Output
10.00
5.00
0.00
1 2 3 4 5 6 7 8 9 1011
15.00
Average Total Costs (ATC)
Price Cost per unit
10.00
inal Revenue
t Maximizing Output
Total
Output
Units
0
1
2
3
4
5
6
7
8
9
10
11
12
Price Per
Total
Unit
Revenue
(Demand)
(TR)
$8.00
0.00
$7.80
7.80
$7.60
15.20
$7.40
22.20
$7.20
28.80
$7.00
35.00
$6.80
40.80
$6.60
46.20
$6.40
51.20
$6.20
55.80
$6.00
60.00
$5.80
63.80
$5.60
67.20
Total
Costs
(TC)
10.00
14.00
17.50
20.75
23.80
26.70
29.50
32.25
35.10
38.30
42.70
48.70
57.70
Average
Total
Marginal Marginal
Costs
Cost
Revenue
(ATC)
(MC)
(MR)
-14.00
4.00
7.80
8.75
3.50
7.40
6.92
3.25
7.00
5.95
3.05
6.60
5.34
2.90
6.20
4.92
2.80
5.80
4.61
2.75
5.40
4.39
2.85
5.00
4.26
3.20
4.60
4.27
4.40
4.20
4.43
6.00
3.80
4.81
9.00
3.40
Total
Profit
(TP)
-10.00
-6.20
-2.30
1.45
5.00
8.30
11.30
13.95
16.10
17.50
17.30
15.10
9.50
MC
10
Monopoly Profit
MR
4
2
0
1
Output
10
11
12
0
1
Output
10
11
12
Demand Price
Revenue-Cost C
80
Total Costs/T
70 otal Revenue
MC=MR
Unit (Demand)
60
50
40
30
20
10
0
1
Output
ke the
ittle or
t perfect
hest
cts by
they
ut if it's
rice is
meet
Revenue-Cost Comparison
enue
Output
10 11 12 13