Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please do not answer if you are the same guy that was answering these questions before. I cannot understand your explanation, and I don't even
Please do not answer if you are the same guy that was answering these questions before. I cannot understand your explanation, and I don't even think you are answering the questions in order, or correctly.
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 fixed costs per month are $10,000. Shown below are his average variable costs per 1000lbs of food moved. These represent the costs of storing and transporting the food, not purchasing it. a. (10 points) Find his MC curve and his ATC. b. (10 points) If the cost of the food alone per 1000bs is $100, how much should he "move" if he can get $300 per 1000lbs ? Explain. c. (10 points) Ervin contemplates moving his entire operation to a modern warehouse which would increase his monthly fixed 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 1000 bs to stay at $300. Would Ervin better or worse off with the addition to the warehouse? Explain. 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 fixed costs per month are $10,000. Shown below are his average variable costs per 1000lbs of food moved. These represent the costs of storing and transporting the food, not purchasing it. a. (10 points) Find his MC curve and his ATC. b. (10 points) If the cost of the food alone per 1000bs is $100, how much should he "move" if he can get $300 per 1000lbs ? Explain. c. (10 points) Ervin contemplates moving his entire operation to a modern warehouse which would increase his monthly fixed 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 1000 bs to stay at $300. Would Ervin better or worse off with the addition to the warehouse? ExplainStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started