Quantitative Methods with Economics

QUANTIATIVE
METHODS WITH
ECONOMICS
STUDENT ID:
[Pick the date]

Question 1
The three types of outer housing i.e. silver, chromium and titanium that are used for making
drones. The associated data is represented below.
Silver Chromium Titanium
Cost of metal housing $ 18.00 $ 21.00 $ 26.00
Cost of electric parts $ 12.50 $ 12.50 $ 12.50
Selected sale price $ 37.00 $ 44.00 $ 53.00
Fixed production cost $ 250.00 $ 250.00 $ 250.00
(1) Total cost and total revenue function
Variable cost
Variable cost (VC) = Cost of metal housing + Cost of electric parts
For Silver = 18 + 12.5 = $30.50
For Chromium = 21 + 12.5 = $33.50
For Titanium = 26+ 12.50 = $38.50
Total cost
Total cost (TC) = (Number of units *Variable cost) + Fixed cost
Assuming number of units as Q
For Silver = (Q *30.50) + 250 = 30.50 Q + 250
For Chromium = (Q*33.50) + 250 = 33.50 Q + 250
For Titanium = (Q *38.50) + 250 = 38.50 Q + 250
Total revenue
TR = P*Q
Graphical representation
2

For Silver
For Chromium
For Titanium
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