QUESTION 22 4. Kate's Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate's machinery costs $100 per day and is the only fixed input. Her variable cost consists of the wages paid to the cooks and the food ingredients. The variable cost per day associated with each level of output is given in the accompanying table. a. Calculate the total cost, the average variable cost, the average total cost, and the marginal cost for each quantity of output Quantity Total Total Cost Average Average Marginal of meals | Variable Cost Variable Cost | Total Cost Cost 0 0 10 200 20 300 30 430 40 700 50 1,000 What is A? |_ QUESTION 23 4a. What is B? QUESTION 24 4a. Whatis C? QUESTION 25 4a. What is D QUESTION 26 Suppose that the price at which Kate can sell catered meals is $21 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt iEv E V v Ix P QUESTION 27 4c. Suppose that the price at which Kate can sell catered meals is $17 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt Ev IEv A v v IX E PQUESTION 28 4d. Suppose that the price at which Kate can sell catered meals is $13 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Arial 10pt IE v A v IX PQUESTION 29 Refer to the graph below of Mindy's short-run and long-run costs for her malt shop. Mindy's Malts Cost per shake 01 2 3 4 5 6 7 8 9 Quantity of shakes a. Mindy's inputs include refrigerators, malt mix, cups, sprinkle toppings, and workers. VWhat are Mindy's fixed inputs and what are her variable inputs? () Fixed: refrigerators, cups, toppings Variable: everything else () Fixed: refrigerators, workers Variable: everything else () Fixed: refrigerators Variable: everything else () Fixed: refrigerators, malt, mix Variable: everything else QUESTION 30 QUESTION 31 c. If Mindy usually produces 3 malts but a there is a street festival outside of her shop making her produce more malts in the short run, what point will suitable for her business? Explain your choice. Hint: Consider only A or D. OB O A QUESTION 32 d. If Mindy were producing at point D for a long time, what should she do? Hint: Over the long-run, you can adjust costs that cannot be changed in the short-run ncrease VARIABLE costs ncrease FIXED costs () Decrease FIXED costs () Decrease VARIABLE costs QUESTION 33 e. Assuming that producing 6 malts is the minimum of the LRATC curve, Mindy will experience (increasing/decreasing) returns to scale moving from 6 to 9 malts. () Decreasing ) Increasing () Cannot tell ) It varies