Question
Emma sells hand-made shawls in a perfectly competitive market for 18 per shawl. Emma's fixed costs are 10, and she is capable of producing up
Emma sells hand-made shawls in a perfectly competitive market for 18 per shawl. Emma's fixed costs are 10, and she is capable of producing up to 6 shawls per week. (10%)
(a) Use that information to fill in the table below. (Hint: Thevariable cost of the first unit of production equals its marginal cost and total variable cost is simply the sum of the marginal costs up of the units of production up to any particular quantity of output)
(b) What quantity of shawls should Emma produce in order to maximize her profit?
(c) At the profit-maximizing level of output, how do marginal revenue and marginal cost compare?
(d) Suppose that Emma's fixed cost suddenly falls to 7. How should Emma alter her production to account for this sudden decrease in cost?
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6685d11d68c7e_8536685d11d4ea9f.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started