PC Spreadsheet Instructions:

Microeconomics Course Assignment

In fulfillment of Course ePortfolio and CSIS requirement
Part
Part1 1:
Perfect Competition Market Structure-SPREADSHEET
Spreadsheet

Using the spread sheet data provided, complete the following steps:
1. Spreadsheet Title : Costs of Production and Profit Maximization Analysis for the Perfect Competitive Market
2. Borders: Place border around each cell in the spread sheet.
3. Column Titles: Type full title for each 8 columns (ie) (TFC) = Total Fixed Costs (TFC). Titles are to be "stacked" a
4. BOLD all titles used throughout assignment
5. Cell Formulas: construct the appropriate fomula for each blank data cell
6. Data Cells: Each should have a $ sign and rounded to 2 decimals (.00) places.
erfect Competitive Market Structure (two lines)

Titles are to be "stacked" and "centered".

Part 2 GRAPHS:

Construct the following Smooth Line Graphs below your spreadsheet:

a) A graph that compares: MC, ATC, AVC, AFC. Title this graph: Average Costs of Production. Be certain to appropriately label ax
font)
b) A graph that compares: TC, TVC, TFC. Title this graph: Total Costs of Production. Be certain to appropriately label axis (10pt fo
c) A graph that compares: TR with TC. Title this graph: Profit Maximization. Using the data spreadsheet determine what level o
production is the most profitable. Insert a colored, vertical line that indicates this Profit Maximizing point. Shadow the line. Be c
appropriately label axis (10pt font)
d) A graph that compares: ATC, MC, and MR. Title this graph: Measuring Total Profits. Insert a colored, shadowed, vertical line i
what level of production total profits are the greatest. Align this graph (d) under graph (c) at the appropriate profit maximizing p
level. Be certain to appropriately label the axis (10pt font)
e) On the completed spreadsheet data: high light (color) the entire row showing the proift maxizing level of production
f) On (e) above: Insert (arrowhead lines) indicating where MC = MR. Connect these arrows to a side-bar label: Marginal Costs = M
Revenue.
g) On (e) above: Insert (arrowhead lines) indicating where Maximum Profit at profit maximizing output. Connect these arrows t
label: Maximum Profit at Profit Maximizing Output.
h) Each grpah should include the use of (gradient, texture, and shape effects (preset 2)) of your choice. Most will be found unde
Chart Tools, Format, and Layout.
Part 3 ANALYSIS:
a) Insert a (Text Box) and answer the following questions: (Analysis)
1. Explain in your own words why MC=MR is the optimum level of output.
2. Assume prices dropped to $5.35. What then would be the profit maximizing or loss minimizing level of production ?
3. Explain how a perfectly competitive firm determines its optimum level of output.
appropriately label axis (10pt

tely label axis (10pt font)

etermine what level of
Shadow the line. Be certain to
dowed, vertical line indicating at
e profit maximizing production
f production
bel: Marginal Costs = Marginal
onnect these arrows to a side-bar

ost will be found under the tab:

of production ?
 Costs of Production
Profit Maximization Analysis for the Perfect Competitive market structure

Total Total Fized Costs Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost
Output/hr (TFC) (TVC) (TC) (AFC) (AVC) (ATC) (MC)
0 $12.00 $0.00 $ 12.00 $ - $ - $ - $ -
1 $12.00 $6.00 $ 18.00 $ 12.00 $ 6.00 $ 18.00 $ 6.00
2 $12.00 $9.00 $ 21.00 $ 6.00 $ 4.50 $ 10.50 $ 3.00
3 $12.00 $11.00 $ 23.00 $ 4.00 $ 3.67 $ 7.67 $ 2.00
4 $12.00 $12.00 $ 24.00 $ 3.00 $ 3.00 $ 6.00 $ 1.00
5 $12.00 $14.00 $ 26.00 $ 2.40 $ 2.80 $ 5.20 $ 2.00
6 $12.00 $17.00 $ 29.00 $ 2.00 $ 2.83 $ 4.83 $ 3.00
7 $12.00 $21.00 $ 33.00 $ 1.71 $ 3.00 $ 4.71 $ 4.00
8 $12.00 $26.00 $ 38.00 $ 1.50 $ 3.25 $ 4.75 $ 5.00
9 $12.00 $32.00 $ 44.00 $ 1.33 $ 3.56 $ 4.89 $ 6.00
10 $12.00 $39.00 $ 51.00 $ 1.20 $ 3.90 $ 5.10 $ 7.00
11 $12.00 $47.00 $ 59.00 $ 1.09 $ 4.27 $ 5.36 $ 8.00
Market Price Marginal
Perfect Total Total Revenue
Competition Revenue Profit (MR)
$6.00 $ - $ (12.00) $ -
$6.00 $ 6.00 $ (12.00) $ 6.00
$6.00 $ 12.00 $ (9.00) $ 6.00
$6.00 $ 18.00 $ (5.00) $ 6.00
$6.00 $ 24.00 $ - $ 6.00
$6.00 $ 30.00 $ 4.00 $ 6.00
$6.00 $ 36.00 $ 7.00 $ 6.00 Marginal C
$6.00 $ 42.00 $ 9.00 $ 6.00
$6.00 $ 48.00 $ 10.00 $ 6.00 Maximum
$6.00 $ 54.00 $ 10.00 $ 6.00
$6.00 $ 60.00 $ 9.00 $ 6.00 Marginal Cost= Marginal revenue at
$6.00 $ 66.00 $ 7.00 $ 6.00 the optimum level of output because
that is where your total profit is at its
highest.
If the price were to drop down to
$5.35 then the optimum level of
output would be at 11.
Perfectly competitive firms are price
takers and so their optimum level of
output is where marginal cost =
marginal revenue.
 Average Costs of Production
$20.00

$18.00

$16.00

$14.00

$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$-
1 2 3 4 5 6 7 8 9 10 11 12

Average Fixed Cost (AFC) Average Variable Cost (AVC) Average Total Cost (ATC) Marginal Cost (MC)
 Total Costs of Production
$70.00

$60.00

$50.00

$40.00

$30.00

$20.00

$10.00

$0.00
1 2 3 4 5 6 7 8 9 10 11 12

Total Fized Costs (TFC) Total Variable Cost (TVC) Total Cost (TC)
Profit Maximization
Microeconomics Course Assignment
In fulfillment of Course ePortfolio and CSIS requirement
Part 4 Monopoly Market Structure - SPREADSHEET

Using the spread sheet data provided, complete the following steps:
1. Spreadsheet Title : Monopoly Profit Maximizing Analysis
2. Borders: Place border around each cell in the spread sheet.
3. Column Titles: Type full title for each 6 columns (ie) (TR) = Total Revenue (TR). Titles are to be "stacked" and "c
4. BOLD all titles used throughout assignment
5. Cell Formulas: construct the appropriate fomula for each blank data cell
6. Data Cells: Each should have a $ sign and rounded to 2 decimals (.00) places.
s are to be "stacked" and "centered".
 Monopoly Profit Maximizing Analysis

Total Price Per Average Marginal

Output Unit Total Total Cost Total Profit Total Cost Marginal Revenue
Units (Demand) Revenue (TR) (TC) (TP) (ATC) Cost (MC) (MR)
0 $ 7.10 $ - $ 9.00 $ (9.00) $ - $ - $ -
1 $ 6.90 $ 6.90 $ 13.00 $ (6.10) $ 13.00 $ 4.00 $ 6.90
2 $ 6.70 $ 13.40 $ 16.60 $ (3.20) $ 8.30 $ 3.60 $ 3.25
3 $ 6.50 $ 19.50 $ 19.85 $ (0.35) $ 6.62 $ 3.25 $ 2.03
4 $ 6.30 $ 25.20 $ 22.90 $ 2.30 $ 5.73 $ 3.05 $ 1.43
5 $ 6.10 $ 30.50 $ 25.80 $ 4.70 $ 5.16 $ 2.90 $ (1.06)
6 $ 5.90 $ 35.40 $ 28.60 $ 6.80 $ 4.77 $ 2.80 $ (0.82)
7 $ 5.70 $ 39.90 $ 31.35 $ 8.55 $ 4.48 $ 2.75 $ (0.64)
8 $ 5.50 $ 44.00 $ 34.20 $ 9.80 $ 4.28 $ 2.85 $ (0.51)
9 $ 5.30 $ 47.70 $ 37.40 $ 10.30 $ 4.16 $ 3.20 $ (0.41)
10 $ 5.10 $ 51.00 $ 41.80 $ 9.20 $ 4.18 $ 4.40 $ (0.33)
11 $ 4.90 $ 53.90 $ 47.80 $ 6.10 $ 4.35 $ 6.00 $ (0.26)
12 $ 4.70 $ 56.40 $ 56.80 $ (0.40) $ 4.73 $ 9.00 $ (0.21)
) A graph that compares: Price/Unit Demand, Marginal Cost, Marginal Revenue, and Average Total Costs. Title this graph:
al Costs. Title this graph: Monopoly Profit Determination
 Monopoly Profit Determination
most profitable price
$14.00
level,

$12.00
profit maximizing
output

$10.00

$8.00

$6.00
Monopoly Profit

$4.00
MC=MR

$2.00

$-
1 2 3 4 5 6 7 8 9 10 11 12 13

$(2.00)

Price Per Unit (Demand) Average Total Cost (ATC) Marginal Cost (MC) Marginal Revenue (MR)
 Revenue - Cost Comparison
$60.00

the proift
maxizing level

$50.00

$40.00

$30.00

Explain in your own words why MC=MR is a profit maximizing production

level for the Monopoly
Monopolists select the Mr=MC to charge the price and then look at the
$20.00
demand curve the price aboce the the average cost is their profit.
Monopolies are inefficient because they will produce onlyt as many as they
need to to make thier maximum profit as compared to perfect competition
where the only way they make more money is to sell more units. They are
also price setters so they do not have any competition and are able to
control the entire market.
$10.00

$-
1 2 3 4 5 6 7 8 9 10 11 12 13

Total Revenue (TR) Total Cost (TC)

Part 5 GRAPHS:
Construct the following Smooth Line Graphs below your spreadsheet:
a) A graph that compares: Price/Unit Demand, Marginal Cost, Marginal Revenue, and Average T
b) Add to graph: colored dashed lines indicating:
(1) most profitable price level,
(2) profit maximizing output,
(3) ATC level. Also indicate the "area of monopoly profitablility" by typing the words Monopo
c) Add to graph: arrows indicating Demand Price juncture, MC=MR, Average Total Costs. Conne
d) A graph that compares: TR with TC. Title this graph: Revenue - Cost Comparison. Be certain t
e) On the completed spreadsheet data: high light (color) the entire row(s) showing the proift ma
f) Each graph should include the use of (gradient, texture, and shape effects of your choice. Mos

Part 6 ANALYSIS:
a) Insert a (Text Box) below your spreadsheet and graphs and answer the following questions:
1. Explain in your own words why MC=MR is a profit maximizing production level for the Mon
2. Explain how the monoploist determines where to price his product
3. A monopoly is considered an inefficient use of resources for what two reasons? (explain)
 evenue, and Average Total Costs. Title this graph: Monopoly Profit Determination.

ping the words Monopoly Profit

rage Total Costs. Connect these arrows to side-bar labels for each.
omparison. Be certain to appropriately label axis as well as TR and TC curves. (14pt font)
s) showing the proift maxizing level (range) of production
cts of your choice. Most will be found under the tab: Chart Tools, Format, and Layout.

e following questions:
uction level for the Monopoly
two reasons? (explain)