ib-economics-quantitative

E.g.(2) The firm below has the following output, price, and cost figures:Output Total Total cost Total profitrevenue100 $2500 $1700200 $3800 $3000 $800300 $3600 $0At an output of 200 units, the total profit is total revenue – total cost = $3,800 -$3,000 = $800.It can also be calculated by taking the profit per unit at the output, i.e. $4, andmultiplying by the number of units sold, i.e. 200, to get $4 x 200 = $800.Now you have a go!!Question 5.6In the tables above, calculate and fill in the missing profit figures.Calculate different profit levels from diagrams.Step1If you are given a diagram and asked to calculate profits, then you simply use the profitequations given above and the values given in the diagram.E.g.In the diagram above, the profit per unit from selling 250 units is calculated by findingthe price at which 250 units are sold, the average cost at which 250 units are sold,and then taking away the cost from the price. In this case, it will be: price – averagecost = $20 x $13 = $7.To find the total profit from selling 250 units, we need to take the profit per unit andmultiply it by the number of units sold. In this case, it will be: profit per unit x numberof units sold = $7 x 250 units = $1,750.Now you have a go!!Produced by Ian Dorton & Jocelyn Blink Page 38