00:01
So it looks like there's a bit of a copy -paste error here.
00:02
It looks like one through four is all the same, right? all these are the same, but we'll do the problem anyway.
00:11
It's a great problem.
00:12
We're told that the price is equal to 20.
00:14
We're told that the quantity is equal to 200.
00:17
We're told that average variable cost is 16, marginal cost is equal to 18, and average total cost is equal to 23 .2.
00:28
Right so let's graph that let's let's let's look at this cost structure quantity and dollars we know the price is equal not my best straight line we know the price is equal to 20 at a quantity of 200 we know that average variable cost is here we know that marginal cost is here and so if marginal cost is above average variable cost.
00:58
Average variable cost has got to be upward sloping, right? oh, has got to be upward sloping.
01:03
It's being dragged upwards by marginal cost.
01:07
So average variable cost looks something like this.
01:11
Marginal cost must look something like this, right? and average total cost is therefore something like this, right? average total cost, which up here is at 23 .2.
01:28
Right? so there's a picture of 23 .4, sorry.
01:33
There's a picture of the cost structure in this particular industry.
01:38
The question is, is it maximizing, right? maximizing? the answer is no, right? no...