Must Be Done On A Spreadsheet With Calculations Shown

Must Be Done On A Spreadsheet With Calculations Shown

For this assignment, you will utilize MS Excel to perform calculations based on provided data related to a firm's pricing and output decisions in imperfect competition. Your task involves completing a detailed table with calculations for costs, revenues, and marginal values, and then creating a graph illustrating key economic metrics such as average fixed costs, average variable costs, total costs, marginal revenue, and marginal costs. The final output will be imported into an MS Word document for submission, demonstrating your understanding of cost analysis and decision-making in non-perfect markets.

Paper For Above instruction

Understanding the cost structures and revenue streams of a firm operating outside pure competition, such as in monopolistic or oligopolistic markets, is essential for strategic decision-making. This assignment demands meticulous analysis and visualization of various cost and revenue measures, enabling firms to optimize their output and pricing strategies. Using MS Excel, you will calculate the missing values in the given data set, followed by the presentation of these calculations through an appropriate graph. This process not only enhances quantitative skills but also deepens comprehension of market behaviors and firm strategies in imperfect competition contexts.

Starting with the provided data, the first step is to complete the table by calculating total fixed costs, total variable costs, total costs, marginal costs, and marginal revenues where necessary. Fixed costs can be inferred as the average fixed cost multiplied by the output level, or directly identified from the data if explicitly provided. Variable costs are derived by subtracting fixed costs from total costs, and total costs are the sum of fixed and variable costs at each output level. Marginal cost is then calculated as the change in total cost divided by the change in output between successive levels, while marginal revenue is determined as the change in total revenue over the change in output.

Once the calculations are completed in Excel, the next essential step is creating a graph with multiple series representing average fixed costs (AFC), average variable costs (AVC), average total costs (ATC), marginal revenue (MR), and marginal costs (MC). The graph should clearly depict how these metrics evolve as output changes and can be plotted with output levels on the x-axis and the respective cost/revenue measures on the y-axis. This visual representation will aid in identifying the profit-maximizing output level, where marginal revenue equals marginal cost, and understanding the cost behavior of the firm across different output levels.

Complete the table with the following calculations:

• Determine Total Fixed Costs (TFC): Usually constant, can be calculated as fixed costs per unit times output where data allows.
• Calculate Total Variable Costs (TVC): Total Cost (TC) minus TFC.
• Compute Total Costs (TC): Sum of TFC and TVC.
• Calculate Marginal Cost (MC): Change in TC divided by change in output between successive levels.
• Determine Marginal Revenue (MR): Change in Total Revenue divided by change in output.
• Compute Averages: AFC, AVC, ATC for each output level.

Creating the graph:

• Plot AFC, AVC, ATC, MR, and MC against output levels to visualize cost and revenue trends.
• Use different colors and labels for clarity, and include a legend.
• Ensure axes are labeled appropriately, with smooth curves to show the progression across output levels.

The analysis drawn from this work will help in understanding the optimal output level where profit is maximized, and how costs and revenues behave in non-pure competition. This exercise integrates cost calculation techniques with graphical analysis, fostering a more profound grasp of firm behavior under market imperfections.

References

• Mankiw, N. G. (2021). Principles of Economics (9th Edition). Cengage Learning.
• Pindyck, R. S., & Rubinfeld, D. L. (2018). Microeconomics (9th Edition). Pearson.
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• Perloff, J. M. (2019). Microeconomics with Calculus. Pearson.
• Frank, R. H., & Bernanke, B. S. (2019). Principles of Economics (7th Edition). McGraw-Hill Education.
• Baumol, W. J., & Blinder, A. S. (2015). Microeconomics: Principles and Policy. Cengage Learning.
• Stiglitz, J. E., & Walsh, C. E. (2002). Principles of Macroeconomics (4th Edition). W.W. Nortons & Company.
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• Hirschleifer, J., & Peirce, A. (2012). Price Theory and Applications. Pearson.