Assignment 2: Market Forms
Study of different market structures and their economic impact.
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Assignment 2: Market Forms
For this assignment you will do a significant portion of work in MS Excel and import it into an MS
Word document for submission. You will use the data below to address Price and Output decisions
faced by firms that are not in pure competition. Some numbers may be rounded.
Table 1
Output
Average
Fixed cost
Average
Variable
Cost
Average Total
Cost
Marginal
Cost Price
Total
Revenue
Marginal
Revenue
0 $ 345.00 0
1 $ 180.00 $ 135.00 $ 315.00 $315.00 $ 300.00 $300.00 $300.00
2 $ 90.00 $ 127.50 $ 217.50 $120.00 $ 249.00 $498.00 $198.00
3 $ 60.00 $ 120.00 $ 180.00 $105.00 $ 213.00 $639.00 $141.00
4 $ 45.00 $ 112.50 $ 157.50 $90.00 $ 189.00 $756.00 $117.00
5 $ 36.00 $ 111.00 $ 147.00 $105 $ 165.00 $825.00 $69.00
6 $ 30.00 $ 112.50 $ 142.50 $120 $ 144.00 $864.00 $39.00
7 $ 25.71 $ 115.70 $ 141.41 $134.87 $ 126.00 $882.00 $18.00
8 $ 22.50 $ 121.90 $ 144.40 $165.33 $ 111.00 $888.00 $6.00
9 $ 20.00 $ 130.00 $ 150.00 $194.8 $ 99.00 $891.00 $3.00
10 $ 18.00 $ 139.50 $ 157.50 $225 $ 87.00 $870.00 -$21.00
Address the following:
1. Complete Table-1. Summarize your calculations.
2. Prepare a chart showing:
◦ Average Fixed Costs
◦ Average Variable Costs
◦ Average Total Costs
◦ Marginal Revenue
◦ Marginal Costs
3. Using the data in the table and on your graph, explain the profit maximizing, or loss minimizing
level of output.
4. Define a normal profit and an economic profit. Are normal profits being earned in this
example? Are economic profits present for this firm in this example? Explain your answers.
5. Given the data in the table and the graph, what type of market structure could this be in the
short run? Explain your answers.
6. If the data in Table-1 represents the long run, what type of firm must this data represent?
Explain your answers.
Solution
For this assignment you will do a significant portion of work in MS Excel and import it into an MS
Word document for submission. You will use the data below to address Price and Output decisions
faced by firms that are not in pure competition. Some numbers may be rounded.
Table 1
Output
Average
Fixed cost
Average
Variable
Cost
Average Total
Cost
Marginal
Cost Price
Total
Revenue
Marginal
Revenue
0 $ 345.00 0
1 $ 180.00 $ 135.00 $ 315.00 $315.00 $ 300.00 $300.00 $300.00
2 $ 90.00 $ 127.50 $ 217.50 $120.00 $ 249.00 $498.00 $198.00
3 $ 60.00 $ 120.00 $ 180.00 $105.00 $ 213.00 $639.00 $141.00
4 $ 45.00 $ 112.50 $ 157.50 $90.00 $ 189.00 $756.00 $117.00
5 $ 36.00 $ 111.00 $ 147.00 $105 $ 165.00 $825.00 $69.00
6 $ 30.00 $ 112.50 $ 142.50 $120 $ 144.00 $864.00 $39.00
7 $ 25.71 $ 115.70 $ 141.41 $134.87 $ 126.00 $882.00 $18.00
8 $ 22.50 $ 121.90 $ 144.40 $165.33 $ 111.00 $888.00 $6.00
9 $ 20.00 $ 130.00 $ 150.00 $194.8 $ 99.00 $891.00 $3.00
10 $ 18.00 $ 139.50 $ 157.50 $225 $ 87.00 $870.00 -$21.00
Address the following:
1. Complete Table-1. Summarize your calculations.
2. Prepare a chart showing:
◦ Average Fixed Costs
◦ Average Variable Costs
◦ Average Total Costs
◦ Marginal Revenue
◦ Marginal Costs
3. Using the data in the table and on your graph, explain the profit maximizing, or loss minimizing
level of output.
4. Define a normal profit and an economic profit. Are normal profits being earned in this
example? Are economic profits present for this firm in this example? Explain your answers.
5. Given the data in the table and the graph, what type of market structure could this be in the
short run? Explain your answers.
6. If the data in Table-1 represents the long run, what type of firm must this data represent?
Explain your answers.
Solution
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Subject
Economics