Exercise 15 (4 points) Quellos AS has the following connection between costs in millions of kroner and production volume in number of units: Production volume: 0 1000 2000 3000 4000 5000 6000 Costs: 9 10 10.9 11.7 12.4 13 13.5 a) How big are the company's variable costs when the production volume is 4,000 units? b) What are the company's fixed costs?
Added by Collin D.
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We can do this by finding the difference in costs between two production volumes and dividing it by the difference in production volume. For example, to find the variable costs at 4,000 units, we can use the following calculation: Variable costs = (Costs at 4,000 Show more…
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The table below shows cost, C(q), and revenue, R(q). q | 0 | 500 | 1000 | 1500 | 2000 | 2500 | 3000 R(q) | 0 | 3375 | 6750 | 10125 | 13500 | 16875 | 20250 C(q) | 6250 | 8405.5 | 9483.25 | 10321.5 | 11159.75 | 13075.75 | 18225 At approximately what production level, q, is profit maximized? q ≈ 3000 units What is the price of the product? price = 6.75 dollars What are the fixed costs? fixed costs = 11250 dollars
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