Ignoring the opportunity cost of the building, land, and equipment, calculate:

(1) The minimum average variable cost.

(2) Assuming that factories minimize their variable costs, the gain or loss if prices were 5% higher than your answer to (1). That is, price = your answer to (1) x 1.05.

Including the opportunity cost of the building, land, and equipment, calculate:

(3) The price that would ensure that economic profits are not negative. You should assume that each factory operates where average costs are minimized. This may be different from the production level in (1).

There should be a total of 12 answers.