Blue Shark Surf Shop, Santa Cruz, California. Use the information for average weekly figures to derive formulas to complete the information in the table below (Items 15-23). Hint: Use the information and formulas in the table to help you complete this process.
Revenues: Average weekly sales figures based upon varying the price of the average surfboard.
Fixed Costs: Weekly Fixed Costs: Rent $500, Insurance $50, Utilities $25, Misc. $25.
Variable Costs: The average cost to produce a surfboard: $50.
Complete Table Below [1-9]:
Price x Quantity Sum all of the Unit variable Total
Total
Change in Change in Total Cost Total
Basic Formula
11
Excel formulas for the various functions. Using the power of Excel (first row formulas), use Fill-Down function to =B14*C14 complete each column to save yourself from creating a calculation in each cell (very time-consuming). Ignore the : mark when creating the formulas. See the next worksheet for instructions for using the fill.
Enter figure
$50*C14
$14*F14
-P=:
G15/15
=F15/F14
D14/C15-14*G14*(C15-C14)
12
3] Total 1 Total 2) Total Fixed Variable 4) Total [RevenueTR Cost(TFC) Cost[TVC] Cost(TC
6] Marginal 8] Average 9) Average Revenue 7] Marginal Total Cost Variable (MR) Cost [MC] [ATC) Cost [AVC]
Price Demand Curve [surfboards] Quantity $300 $290 $280 $270 260 $250 $240 $230 $220 210 $200 190 $180 $170 $160 $150 $140 $130 $120 $110 100
5 Profit
N
9 0 11 12
14 15 16
19 20 21
35
Answer all of the Blue Shark analysis questions below (Items 10-16).
39 40
10) What is the profit-maximizing price and quantity?
41
11) What is the revenue-maximizing price and quantity?
42 43
12) Very briefly, what is the significance of where marginal cost equals marginal revenue?
45 46
13) When total cost exceeds total revenue, profits are?
14) When total revenue exceeds total cost, profits are?
50 IS 52
15) Is this firm earning an economic profit if it is operating at the profit-maximizing/loss minimizing output? (Yes or No)
16) Below what price level would the firm shut down?
54 55 56
Submit when completed table: