Question
2. You are given the following information. The average total cost curve for Susan's Pasta Heaven reaches a minimum at a quantity of 100 pounds
2. You are given the following information. The average total cost curve for Susan's Pasta Heaven reaches a minimum at a quantity of 100 pounds per day and a price of $2 per pound. The marginal cost of pasta production is falling when output is less than 30 pounds per day, but then begins to rise. a. Sketch the ATC and MC curves for Susan's Pasta Heaven. (Note: You have enough information to get the basic shapes, although you cannot plot all the points). b. Suppose the market price of fresh pasta is $4 per pound. On the diagram you drew for part a. above, show the quantity Susan will produce, and shade a rectangle indicating her profits. (Again, you cannot give specific numbers).
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