you just follow the GUide document to use the same way to solve the problem.

Question

Komalavalli · Accepted Answer

CLA 1 Comprehensive Learning Assessment I – CLO 5, CLO 6
Question 1
	Quantity
	Variable cost
	Fixed cost 
	Total cost
	Average variable cost 
	Average total cost
	Marginal cost
	0
	0
	30
	30
	-
	 
	 
	1
	10
	30
	40
	10
	40
	10
	2
	25
	30
	55
	12.5
	27.5
	15
	3
	45
	30
	75
	15
	25
	20
	4
	70
	30
	100
	17.5
	25
	25
	5
	100
	30
	130
	20
	26
	30
	6
	135
	30
	165
	22.5
	27.5
	35
Question 2
a) Profit/Loss = P*Q – TC
= 25*5 – 130
	= 125 – 130
Loss = $5
Company faces loss of $5 if it sells 5 quantities at $25 per quantity.
b) When a firm charges the price higher than its average total cost at a particular quantity, it will incur a profit. If it charge the price lower than its average total cost at a particular quantity, it will incur a loss. From question 1 table the average total cost for 5 quantities is $26 which is higher than the price of $25.Therefore the company will incur a loss.

you just follow the GUide document to use the same way to solve the problem.

Solution

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