Direction: Solve the problems on the space provided after each number. Show your solutions. You can submit using messenger or using your VLE account. Take a photo of your answers if using messenger to submit. If using VLE, encode your answers and send as file. If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level? Explain your answer. A business firm produces and sells a particular product. Variable cost is P30/unit. Selling price is P40 per unit. Fixed cost is P60,000.What is the break-even quantity and break-even point? Show your solution. A manager makes the statement that output should be expanded as long as average revenue exceeds average cost. Does this strategy make sense? Explain. Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be produced. Output (Q) TFC TVC TC MC TR MR Profit/Loss 05000 150050 250090 3500140 4500200 *Price of ste5el is P175005/unit270 6500350 7500450 8500600 9500800

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Answered: If profit is maximum at sales of 700…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Related questions

Question

Direction: Solve the problems on the space provided after each number. Show your solutions. You can submit using messenger or using your VLE account. Take a photo of your answers if using messenger to submit. If using VLE, encode your answers and send as file.

If profit is maximum at sales of 700 units, does the firm have no choice but to limit sales at this level? Explain your answer.

A business firm produces and sells a particular product. Variable cost is P30/unit. Selling price is P40 per unit. Fixed cost is P60,000.
What is the break-even quantity and break-even point? Show your solution.

A manager makes the statement that output should be expanded as long as average revenue exceeds average cost. Does this strategy make sense? Explain.

Suppose that the steel firm’s costs are shown below: Complete the table and determine the optimal output to be produced.

Output (Q)	TFC	TVC	TC	MC	TR	MR	Profit/Loss
0	500	0
1	500	50
2	500	90
3	500	140
4	500	200
**Price of ste*5	*el is P17*500	*5/unit*270
6	500	350
7	500	450
8	500	600
9	500	800