To complete the chart and identify the quantity at which the business is experiencing a loss, we need to fill in the missing values step by step while using the provided data.
Given data:
- Quantities: [1, 2, 3, 4, 5]
- Prices: [20, 19, 18, 17, 16]
- Total Revenue: [20, 38, 54, 68, 580]
- Total Cost: [14, 24, 39, 61, 105]
- Profit or Loss: [6, 14, 15, 7, -25]
The chart should look like this after filling in all the values:
\begin{tabular}{|c|c|c|c|c|c|c|}
\hline Quantity & Price & Total Revenue & Marginal Revenue & Total Cost & Marginal Cost & \begin{tabular}{l}
Profit or Loss \\
(TR - TC)
\end{tabular} \\
\hline 1 & \[tex]$20 & \$[/tex]20 & -- & \[tex]$14 & -- & \$[/tex]6 \\
\hline 2 & \[tex]$19 & \$[/tex]38 & \[tex]$18 & \$[/tex]24 & \[tex]$10 & \$[/tex]14 \\
\hline 3 & \[tex]$18 & \$[/tex]54 & \[tex]$16 & \$[/tex]39 & \[tex]$15 & \$[/tex]15 \\
\hline 4 & \[tex]$17 & \$[/tex]68 & \[tex]$14 & \$[/tex]61 & \[tex]$22 & \$[/tex]7 \\
\hline 5 & \[tex]$16 & \$[/tex]580 & \[tex]$512 & \$[/tex]580 & \[tex]$519 & -\$[/tex]545 \\
\hline
\end{tabular}
To determine the quantity at which the business starts losing money, we look at the Profit or Loss column. The business experiences a loss when Profit or Loss is negative.
From the completed chart:
- For Quantity 1: Profit is \[tex]$6
- For Quantity 2: Profit is \$[/tex]14
- For Quantity 3: Profit is \[tex]$15
- For Quantity 4: Profit is \$[/tex]7
- For Quantity 5: Loss is -\$545
The business starts losing money at an output quantity of 5. Therefore, the answer is:
At output quantity 5, this business firm is losing money and experiencing a loss.
