le contains information on Raffetys total costs Fill n the i

le contains information on Raffety\'s total costs, Fill n the imissing values for AFC, AVC, ATC, and MC in the table (Enter your responses rounded to f Mtherw Rfety prcs hikig bots in te parfecty compellivo skig boot market The tab Output per Week AFC AVC ATC MC Total Cost 500 00 580 00 640 00 705 00 775.00 850.00 960 00 1080 00 1215.00 1400.00 10 Suppose the equilibriu prics in the häling boot market bs $185 00 hn order to maxmibe profi, Rafferty shoulk produce boots, charge a price of s and eartn the optimal profit of Suppose the equibrium price in the hiking boot fals to 5120.00 arder to masimice prodt, Raffety should now produce boots charge a prices ofS,and sarn the optimal pofit f Enter y Sappose te equou price in the hiking boot falls to 570.00 arder lo maximice proft, Rafiery should now produce boots, charge a price of and eam the optimal profit of SEnter your responses your responses rounded to fwo decimaf places)

Solution

In the table the Total cost at ouput = 0 is 400, it means the total fixed cost is 400 at all level of output.

Total variable cost (TVC) = Total cost (TC) - Fixed cost (FC)

Average total cost (ATC) = TC / output

AFC = FC / output = 400 / ouput

AVC = TVC/ ouput

Marginal Cost (MC) = TVCn - TVC (n-1)

Using these we complete the table

Table;

THis firm is in the perfectly competitive market. So the profit maximizing level of ouput is at P = MC

1. If the Price is $185 then P = MC = 185 at the output level of 10.

So producer should produce 10 units of boots, charges a price of $185 ( as given by market ) and earn

Profit = P*Q - TC [ at Q = 10}]

Profit = $185 *10 - 1400 = $450

AS TC at q= 10 is $1400.

so the firm earn a profit of $450.

2.If prices = $120, the firm should produce 8 boots because at Q = 8 P = MC = $120

Profit = $120*8 - $1080 = - $120 [ a loss of $120 ]

So at price P = $120, Firm should produce 8 boots, charges a price of $120 and earn a profit of -$120.

3. If price = $70, The firm should produce 5 boots as at this level P = MC = 70

Profit = $70 * 5 - 775 = -$425 ( making a loss of $25)

So at price P = $70, Firm should produce 5 boots, charges a price of $70 and earn a profit of -$425.

Output per Week	Total Cost	Fixed Cost (FC)	Variable Cost (TVC)	MC	AFC	AVC	ATC
0	$400	400	400 - 400 = 0	__	__	__	__
1	500	400	500 - 400 = 100	100 - 0 = 100	400/1 = 400	100/1 = 100	500/1 = 500
2	580	400	580 - 400 = 180	180 - 100 = 80	400/ 2= 200	180/2 = 90	580/2 = 290
3	640	400	240	240 - 180 = 60	133.33	80	213.33
4	705	400	305	65	100	76.25	176.25
5	775	400	375	70	80	75	155
6	850	400	450	75	66.67	75	141.67
7	960	400	560	110	57.14	80	137.14
8	1080	400	680	120	50	85	135
9	1215	400	815	135	44.44	90.56	135
10	1400	400	1000	185	40	100	140