Answers

OUTPUTPRICEFC VCTCATCMCTRMRProfit
010010001000
19010040140140409090-50
280100601608020160700
3701007017056.7102105040
4601009019048.5202403050
55010012022044302501030
64010019029048.370240-10-50
73010026036051.4100210-30-150
82010046056070200160-50-400
  1. Profit maximisation is at 4 units, with supernormal profits at £70,000. This is also where MC  MR, at £40,000.

  2. Sales revenue maximising = 6 units, but the firm would make a loss of £20,000.

  3. Efficiency at profit max –  ATC is £52,500 – the lowest possible average total cost is £50,000, hence there is a loss of productive efficiency. The price, of £70,000, is greater than the marginal cost, of £40,000, hence there is also allocative inefficiency.

OUTPUTPRICEFC VCTCATCMCTRMRProfit
02010010100-10
1181061616618182
216101222116321410
314102030108421012
41210304010104868
51010425210.212502-2
68105666111448-2-18
76107484121842-6-42
84109610613.252232-10-74
2020-02-07T16:59:05-05:00

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