Quantitative Methods with Economics - Desklib

QUANTITATIVE METHODS WITH ECONOMICS
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Question 1
The three different type of casting used by factory workers and their respective data and
information is shown below.
Chromium Titanium Zirconium
Cost of casting $75 $150 $240
Cost of gas fittings $38 $36 $42
Sale price $150 $220 $320
Fixed cost $400 $500 $600
Investigation
(1) Total cost and total revenue function along with excel graph
Total cost is a function of fixed cost and variable cost (Samuelson and Marks, 2013).
Variable cost
VC = Cost of casting + cost of gas fittings
For Chromium = 75 +38 = $113
For Titanium = 150 +36 =$186
For Zirconium = 240 +42 = $282
Total cost
TC = (Variable cost * Number of units) + Fixed Cost
Let number of units = Q
For Chromium = $113 Q +400
For Titanium =$186 Q +500
For Zirconium = $282 Q +600
Total revenue is a function of sale price and number of units (Nicholson and Snyder, 2014) .
TR = P Q
For Chromium
1

For Titanium
For Zirconium
Excel graph for TR and TC
2

1 2 3 4 5 6 7 8 9 10
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Chromium
TR & TC Curve
TR TC
1 2 3 4 5 6 7 8 9 10
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Titanium
TR & TC Curve
TR TC
1 2 3 4 5 6 7 8 9 10
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Zirconium
TR & TC Curve
TR TC
3