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Last year, Aria left herjob earning $82,000 per year in order to start her own cupcake business. Her expenses included rent of $1,500 per month,
Last year, Aria left herjob earning $82,000 per year in order to start her own cupcake business. Her expenses included rent of $1,500 per month, as well as $500 per month in supplies and utilities. She hired two workers at $1000 per month for each. She didn't want to rent a professional oven so she purchased one for $6500. She expects it to depreciate at a rate of $900 per year. Over the course of the year, Aria sold 125,000 cupcakes with a revenue of $125,000. Aria is business sawy and knows she must control her costs in this market with so many rms, easy entry and identical products. Therefore, she will only operate at a her prot-maximizing or loss- minimizing level of output. (25 Points) a. Total explicit costs for the year are: b. Total implicit costs for the year are: c. Total xed costs for the year are: d. Total variable costs for the year are: e. Average total costs for the year are: f. Total accounting costs for the year are: g. Total economic costs for the year are: h. Since you can't draw it, briey describe how her demand curve looks. i. Since you can't draw it, briey describe how her MR curve looks and where would you draw it. j. What price will she charge? o. Is she earning a prot? If so, how much? If not, should she shut down ........... why or why not
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