Answer to Question #77262 in Microeconomics for Ahmed ur rehman

Question

Firm has 2400 quantity and v.c is 2.70 new supplier reduced the new v.c is 2.30 and also added advertisement cost 3000 in cost profit 10000 profit contribution 25%of the revenue? ??
T.c
C
Tr
B.e.p
New t.c

Answer 1

Q = 2400, AVC1 = 2.70, AVC2 = 2.30, advertisement cost FC = 3000, profit TP = 10000, profit contribution is 25% of the revenue.
TC = FC + AVC1*Q = 3000 + 2.7*2400 = 9480.
TR = 10000/0.25 = 40000.
P = TR/Q = 40000/2400 = 16.67.
BEP1 = FC/(P - AVC1) = 3000/(16.67 - 2.7) = 214.8 units.
New TC = FC + AVC2*Q = 3000 + 2.3*2400 = 8520.