Overview
Assignment Content
Competency
Interpret production costs and cost curves.
Student Success Criteria
View the grading rubric for this deliverable by selecting the “This item is graded with a rubric” link, which is located in the Details & Information pane.
Scenario
As an economic consultant at Lightning Volt Automotive, your task is to calculate production costs and identify the various production costs that illustrate total cost curves as well as average and marginal cost curves. Then you will determine the firm’s current profit maximizing price and quantity.
Instructions
Use the Excel template linked here to complete the following tasks. All work must be shown to receive credit. Submit the completed spreadsheet.
Rubric:
1. Calculations
A - 4 - Mastery
Calculations of total revenue, marginal revenue, profits or losses, and production costs are all correct.
2. Total Cost Line Plot
A - 4 - Mastery
Line plot that shows total costs, total fixed costs, and total variable costs is correct.
3. Production Costs Line Plot
A - 4 - Mastery
Line plot that shows production costs is correct.
4. Profit Maximizing Price and Quantity
A - 4 - Mastery
Explanation of profit maximizing price and quantity is clear and accurate.