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2. Assume that a technology firm, operating in a perfectly competitive market structure, produces easy to use home computers. The company has fixed costs of
2. Assume that a technology firm, operating in a perfectly competitive market structure, produces easy to use home computers. The company has fixed costs of $95. The marginal costs of producing computers is $150 for the first computer, $150 for the second computer, $160 for the third, $170 for the fourth, $180 for the fifth, $181 for the sixth, and $200 for the seventh. Q Fixed Variable Total Average Average Total Marginal Cost Cost Cost Variable Cost Cost Cost 95.00 95.00 95.00 150.00 245.00 150.00 245.00 150.00 95.00 150.00 245.00 150.00 245.00 150.00 95.00 255.00 160.00 QUI A WN 95.00 170.00 95.00 180.00 95.00 181.00 95.00 200.00 At what price is the break-even point. Explain how you found the break even point based on the values above. At what price is the shutdown point. Explain how you found the shut down point based on the values above. Assume the market price is $200. Please state whether the company is making a profit or a loss. What is the total economic profit or loss? Draw a graph with the MR, MC, and ATC curves to illustrate your answer to Part (D)
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