Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PRICE (Dollars per tote) ATC MC AVC Co 2 6 8 10 12 14 16 18 20 QUANTITY (Thousands of totes) Using the following table,

image text in transcribed
PRICE (Dollars per tote) ATC MC AVC Co 2 6 8 10 12 14 16 18 20 QUANTITY (Thousands of totes) Using the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm's total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per tote) (Totes) (Dollars) (Dollars) (Dollars) (Dollars) 10.00 6,000 44,000 16.00 12,000 44,000 40.00 44,000 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $44,000 per day. In other words, if it shuts down, the firm would suffer losses of $44,000 per day until its fixed costs end (such as the expiration of a building lease). This firm's shutdown price-that is, the price below which it is optimal for the firm to shut down-is per tote

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

Commercial Fishing On The Outer Banks

Authors: R Wayne Gray, Nancy Beach Gray

1st Edition

1439667055, 9781439667057

More Books

Students also viewed these Economics questions

Question

Which of the following is not true about big data?

Answered: 1 week ago

Question

Excel caculation on cascade mental health clinic

Answered: 1 week ago

Question

Always have the dignity of the other or others as a backdrop.

Answered: 1 week ago