Choose a level of output that minimizes costs. Use the below-stated Excel Spread
ID: 1165827 • Letter: C
Question
Choose a level of output that minimizes costs. Use the below-stated Excel Spreadsheet data to determine the Optimal Q value for the following scenario regarding the market for crab:
Market report: We project an average market price of $625 per container of crab.
First Mate’s report: Fixed costs (FC) at $12,500 per month. No changes in any variable costs (VC).
FC 12500 VC 100 Base 3 Increasing Q FC VC TC MC 0 12,500.00 0 12,500.00 0 1 12,500.00 103.00 12,603.00 103.00 2 12,500.00 212.00 12,712.00 109.00 3 12,500.00 327.00 12,827.00 115.00 4 12,500.00 448.00 12,948.00 121.00 5 12,500.00 575.00 13,075.00 127.00 6 12,500.00 708.00 13,208.00 133.00 7 12,500.00 847.00 13,347.00 139.00 8 12,500.00 992.00 13,492.00 145.00 9 12,500.00 1,143.00 13,643.00 151.00 10 12,500.00 1,300.00 13,800.00 157.00 11 12,500.00 1,463.00 13,963.00 163.00 12 12,500.00 1,632.00 14,132.00 169.00 13 12,500.00 1,807.00 14,307.00 175.00 14 12,500.00 1,988.00 14,488.00 181.00 15 12,500.00 2,175.00 14,675.00 187.00 16 12,500.00 2,368.00 14,868.00 193.00 17 12,500.00 2,567.00 15,067.00 199.00 18 12,500.00 2,772.00 15,272.00 205.00 19 12,500.00 2,983.00 15,483.00 211.00 20 12,500.00 3,200.00 15,700.00 217.00 21 12,500.00 3,423.00 15,923.00 223.00 22 12,500.00 3,652.00 16,152.00 229.00 23 12,500.00 3,887.00 16,387.00 235.00 24 12,500.00 4,128.00 16,628.00 241.00 25 12,500.00 4,375.00 16,875.00 247.00 26 12,500.00 4,628.00 17,128.00 253.00 27 12,500.00 4,887.00 17,387.00 259.00 28 12,500.00 5,152.00 17,652.00 265.00 29 12,500.00 5,423.00 17,923.00 271.00 30 12,500.00 5,700.00 18,200.00 277.00 31 12,500.00 5,983.00 18,483.00 283.00 32 12,500.00 6,272.00 18,772.00 289.00 33 12,500.00 6,567.00 19,067.00 295.00 34 12,500.00 6,868.00 19,368.00 301.00 35 12,500.00 7,175.00 19,675.00 307.00 36 12,500.00 7,488.00 19,988.00 313.00 37 12,500.00 7,807.00 20,307.00 319.00 38 12,500.00 8,132.00 20,632.00 325.00 39 12,500.00 8,463.00 20,963.00 331.00 40 12,500.00 8,800.00 21,300.00 337.00 41 12,500.00 9,143.00 21,643.00 343.00 42 12,500.00 9,492.00 21,992.00 349.00 43 12,500.00 9,847.00 22,347.00 355.00 44 12,500.00 10,208.00 22,708.00 361.00 45 12,500.00 10,575.00 23,075.00 367.00 46 12,500.00 10,948.00 23,448.00 373.00 47 12,500.00 11,327.00 23,827.00 379.00 48 12,500.00 11,712.00 24,212.00 385.00 49 12,500.00 12,103.00 24,603.00 391.00 50 12,500.00 12,500.00 25,000.00 397.00 51 12,500.00 12,903.00 25,403.00 403.00 52 12,500.00 13,312.00 25,812.00 409.00 53 12,500.00 13,727.00 26,227.00 415.00 54 12,500.00 14,148.00 26,648.00 421.00 55 12,500.00 14,575.00 27,075.00 427.00 56 12,500.00 15,008.00 27,508.00 433.00 57 12,500.00 15,447.00 27,947.00 439.00 58 12,500.00 15,892.00 28,392.00 445.00 59 12,500.00 16,343.00 28,843.00 451.00 60 12,500.00 16,800.00 29,300.00 457.00 61 12,500.00 17,263.00 29,763.00 463.00 62 12,500.00 17,732.00 30,232.00 469.00 63 12,500.00 18,207.00 30,707.00 475.00 64 12,500.00 18,688.00 31,188.00 481.00 65 12,500.00 19,175.00 31,675.00 487.00 66 12,500.00 19,668.00 32,168.00 493.00 67 12,500.00 20,167.00 32,667.00 499.00 68 12,500.00 20,672.00 33,172.00 505.00 69 12,500.00 21,183.00 33,683.00 511.00 70 12,500.00 21,700.00 34,200.00 517.00 71 12,500.00 22,223.00 34,723.00 523.00 72 12,500.00 22,752.00 35,252.00 529.00 73 12,500.00 23,287.00 35,787.00 535.00 74 12,500.00 23,828.00 36,328.00 541.00 75 12,500.00 24,375.00 36,875.00 547.00 76 12,500.00 24,928.00 37,428.00 553.00 77 12,500.00 25,487.00 37,987.00 559.00 78 12,500.00 26,052.00 38,552.00 565.00 79 12,500.00 26,623.00 39,123.00 571.00 80 12,500.00 27,200.00 39,700.00 577.00 81 12,500.00 27,783.00 40,283.00 583.00 82 12,500.00 28,372.00 40,872.00 589.00 83 12,500.00 28,967.00 41,467.00 595.00 84 12,500.00 29,568.00 42,068.00 601.00 85 12,500.00 30,175.00 42,675.00 607.00 86 12,500.00 30,788.00 43,288.00 613.00 87 12,500.00 31,407.00 43,907.00 619.00 88 12,500.00 32,032.00 44,532.00 625.00 89 12,500.00 32,663.00 45,163.00 631.00 90 12,500.00 33,300.00 45,800.00 637.00 91 12,500.00 33,943.00 46,443.00 643.00 92 12,500.00 34,592.00 47,092.00 649.00 93 12,500.00 35,247.00 47,747.00 655.00 94 12,500.00 35,908.00 48,408.00 661.00 95 12,500.00 36,575.00 49,075.00 667.00 96 12,500.00 37,248.00 49,748.00 673.00 97 12,500.00 37,927.00 50,427.00 679.00 98 12,500.00 38,612.00 51,112.00 685.00 99 12,500.00 39,303.00 51,803.00 691.00Explanation / Answer
calculate average total cost that gives the cost minimizing point. in the below table we have calculated ATC = TC/Q in the last column, it is minimum at Q=64.
Q FC VC TC MC ATC 0 12,500.00 0 12500.00 1 12,500.00 103.00 12603.00 103.00 12603.00 2 12,500.00 212.00 12712.00 109.00 6356.00 3 12,500.00 327.00 12827.00 115.00 4275.67 4 12,500.00 448.00 12948.00 121.00 3237.00 5 12,500.00 575.00 13075.00 127.00 2615.00 6 12,500.00 708.00 13208.00 133.00 2201.33 7 12,500.00 847.00 13347.00 139.00 1906.71 8 12,500.00 992.00 13492.00 145.00 1686.50 9 12,500.00 1,143.00 13643.00 151.00 1515.89 10 12,500.00 1,300.00 13800.00 157.00 1380.00 11 12,500.00 1,463.00 13963.00 163.00 1269.36 12 12,500.00 1,632.00 14132.00 169.00 1177.67 13 12,500.00 1,807.00 14307.00 175.00 1100.54 14 12,500.00 1,988.00 14488.00 181.00 1034.86 15 12,500.00 2,175.00 14675.00 187.00 978.33 16 12,500.00 2,368.00 14868.00 193.00 929.25 17 12,500.00 2,567.00 15067.00 199.00 886.29 18 12,500.00 2,772.00 15272.00 205.00 848.44 19 12,500.00 2,983.00 15483.00 211.00 814.89 20 12,500.00 3,200.00 15700.00 217.00 785.00 21 12,500.00 3,423.00 15923.00 223.00 758.24 22 12,500.00 3,652.00 16152.00 229.00 734.18 23 12,500.00 3,887.00 16387.00 235.00 712.48 24 12,500.00 4,128.00 16628.00 241.00 692.83 25 12,500.00 4,375.00 16875.00 247.00 675.00 26 12,500.00 4,628.00 17128.00 253.00 658.77 27 12,500.00 4,887.00 17387.00 259.00 643.96 28 12,500.00 5,152.00 17652.00 265.00 630.43 29 12,500.00 5,423.00 17923.00 271.00 618.03 30 12,500.00 5,700.00 18200.00 277.00 606.67 31 12,500.00 5,983.00 18483.00 283.00 596.23 32 12,500.00 6,272.00 18772.00 289.00 586.63 33 12,500.00 6,567.00 19067.00 295.00 577.79 34 12,500.00 6,868.00 19368.00 301.00 569.65 35 12,500.00 7,175.00 19675.00 307.00 562.14 36 12,500.00 7,488.00 19988.00 313.00 555.22 37 12,500.00 7,807.00 20307.00 319.00 548.84 38 12,500.00 8,132.00 20632.00 325.00 542.95 39 12,500.00 8,463.00 20963.00 331.00 537.51 40 12,500.00 8,800.00 21300.00 337.00 532.50 41 12,500.00 9,143.00 21643.00 343.00 527.88 42 12,500.00 9,492.00 21992.00 349.00 523.62 43 12,500.00 9,847.00 22347.00 355.00 519.70 44 12,500.00 10,208.00 22708.00 361.00 516.09 45 12,500.00 10,575.00 23075.00 367.00 512.78 46 12,500.00 10,948.00 23448.00 373.00 509.74 47 12,500.00 11,327.00 23827.00 379.00 506.96 48 12,500.00 11,712.00 24212.00 385.00 504.42 49 12,500.00 12,103.00 24603.00 391.00 502.10 50 12,500.00 12,500.00 25000.00 397.00 500.00 51 12,500.00 12,903.00 25403.00 403.00 498.10 52 12,500.00 13,312.00 25812.00 409.00 496.38 53 12,500.00 13,727.00 26227.00 415.00 494.85 54 12,500.00 14,148.00 26648.00 421.00 493.48 55 12,500.00 14,575.00 27075.00 427.00 492.27 56 12,500.00 15,008.00 27508.00 433.00 491.21 57 12,500.00 15,447.00 27947.00 439.00 490.30 58 12,500.00 15,892.00 28392.00 445.00 489.52 59 12,500.00 16,343.00 28843.00 451.00 488.86 60 12,500.00 16,800.00 29300.00 457.00 488.33 61 12,500.00 17,263.00 29763.00 463.00 487.92 62 12,500.00 17,732.00 30232.00 469.00 487.61 63 12,500.00 18,207.00 30707.00 475.00 487.41 64 12,500.00 18,688.00 31188.00 481.00 487.31 65 12,500.00 19,175.00 31675.00 487.00 487.31 66 12,500.00 19,668.00 32168.00 493.00 487.39 67 12,500.00 20,167.00 32667.00 499.00 487.57 68 12,500.00 20,672.00 33172.00 505.00 487.82 69 12,500.00 21,183.00 33683.00 511.00 488.16 70 12,500.00 21,700.00 34200.00 517.00 488.57 71 12,500.00 22,223.00 34723.00 523.00 489.06 72 12,500.00 22,752.00 35252.00 529.00 489.61 73 12,500.00 23,287.00 35787.00 535.00 490.23 74 12,500.00 23,828.00 36328.00 541.00 490.92 75 12,500.00 24,375.00 36875.00 547.00 491.67 76 12,500.00 24,928.00 37428.00 553.00 492.47 77 12,500.00 25,487.00 37987.00 559.00 493.34 78 12,500.00 26,052.00 38552.00 565.00 494.26 79 12,500.00 26,623.00 39123.00 571.00 495.23 80 12,500.00 27,200.00 39700.00 577.00 496.25 81 12,500.00 27,783.00 40283.00 583.00 497.32 82 12,500.00 28,372.00 40872.00 589.00 498.44 83 12,500.00 28,967.00 41467.00 595.00 499.60 84 12,500.00 29,568.00 42068.00 601.00 500.81 85 12,500.00 30,175.00 42675.00 607.00 502.06 86 12,500.00 30,788.00 43288.00 613.00 503.35 87 12,500.00 31,407.00 43907.00 619.00 504.68 88 12,500.00 32,032.00 44532.00 625.00 506.05 89 12,500.00 32,663.00 45163.00 631.00 507.45 90 12,500.00 33,300.00 45800.00 637.00 508.89 91 12,500.00 33,943.00 46443.00 643.00 510.36 92 12,500.00 34,592.00 47092.00 649.00 511.87 93 12,500.00 35,247.00 47747.00 655.00 513.41 94 12,500.00 35,908.00 48408.00 661.00 514.98 95 12,500.00 36,575.00 49075.00 667.00 516.58 96 12,500.00 37,248.00 49748.00 673.00 518.21 97 12,500.00 37,927.00 50427.00 679.00 519.87 98 12,500.00 38,612.00 51112.00 685.00 521.55 99 12,500.00 39,303.00 51803.00 691.00 523.26