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4t Application Assignment Due: Wednesday, November 30, 2022 Ervin runs a wholesale food distributorship in a perfectly competitive industry. Ervin can move up to 10,000
4t\" Application Assignment Due: Wednesday, November 30, 2022 Ervin runs a wholesale food distributorship in a perfectly competitive industry. Ervin can move up to 10,000 pounds of vegetables and fruit per month without increasing his average variable costs of sorting, packing, and transporting the food (i.e., excluding the cost of the food). His current xed costs per month are $10,000. Shown below are his average variable costs per 1000 lbs of food moved. These represent the costs of storing and transporting the food, not purchasing it. i roosed VC Current Output AVC > 100 100 100 100 100 $50 $50 $50 $50 $50 2000 3000 4000 m a. (10 points) Find his MC curve and his ATC. b. (10 points) If the cost of the food alone per 1000le is $100, how much should he \"move" if he can get $300 per 1000 lbs? Explain. c. (10 points) Ervin contemplates moving his entire operation to a modern warehouse which would increase his monthly xed costs by $4,000 to $14,000 but it radically changes his AVC (see table above). Find his MC and ATC for the new modern warehouse. d. (10 points) Ervin expects the price per 1000le to stay at $300. Would Ervin better or worse off with the addition to the warehouse? Explain
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