Before beginning this question read Section 7 of the Supplem

Before beginning this question, read Section 7 of the Supplement: Marginal Cost and Marginal Revenue. You produce and sell Blinkos. The following shows the graph of total cost in hundreds of dollars for seliling q hundred Blinkos. quantity On hundreds of Binko) Click here for a larger picture that you should print out and draw on a.) What is the value of your fixed costs? Include units b.) Approximate your total cost and variable cost when you produce 8 hundred Blinkos. hundred dollars hundred dollars C.) Find a quantity at which total cost is 50 hundred dollars. d.) Find a quantity at which variable cost is $2000. e.) Estimate the marginal cost at 24 hundred Blinkos. f.) You are able to sell Blinkos for $2 each. Sketch the graph of total revenue on your copy of the TC graph and determine the smallest quantity at which you do not take a loss hundred Blinkos hundred Blinkos dollars per Blinko hundred Blinkos

Solution

a) Fixed cost = 15 * 100 = 1500 dollar

b) TC(8) = 25 hundred dollars

VC(8) = TC - FC = 25 -15 =1000 dollar

c) 33 hundred blinkos at which total cost is 50 hundred dollar

d) 20 hundred blinkos at which variable cost is 2000