Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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? Explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting And Reporting

Authors: Barry Elliott, Jamie Elliott

5th Edition

0273651560, 978-0273651567

More Books

Students also viewed these Accounting questions

Question

Question 1 (a2) What is the reaction force Dx in [N]?

Answered: 1 week ago