Question 1

Sweetie Juice is one of the many shops producing and selling watermelon juice in the Hope Town. Sweetie Juice incurs a fixed cost of $50,000 per month. Table 1 illustrates the cost schedule of the shop and Table 2 illustrates the demand and supply schedule of the market for watermelon juice.

Production Average Price Quantity Quantity Output Variable Cost ($ per litre) Demanded Supplied (litres per ($ per litre) (litres per (litres per month) month) month) 0 NA 100 2,000,000 400,000 1,000 52 120 1,600,000 800,000 2,000 44 140 1,200,000 1,200,000 3,000 76 160 800,000 1,600,000 4,000 97 180 400,000 2,000,000 5,000 115 200 0 2,400,000 Table 1 - Cost schedule of Sweetie Table 2 - Demand and supply schedule of the Juice watermelon juice marketQuantity Average Total Total Cost Marginal Cost (liters per month) ($) ($) Cost ($) (Remarks: Significant mark deduction applies if the table is broken into 2 parts or 2 tables)