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Refer to the graph below of Mindy's short-run and long-run costs for her malt shop. Mindy's Malts Cost per SRATC3 shake SRATC1 SRATC2 LRATC D
Refer to the graph below of Mindy's short-run and long-run costs for her malt shop. Mindy's Malts Cost per SRATC3 shake SRATC1 SRATC2 LRATC D B A 0 2 7 8 9 Quantity of shakes a. Mindy's inputs include refrigerators, malt mix, cups, sprinkle toppings, and workers. What are Mindy's fixed inputs and what are her variable inputs? O Fixed: refrigerators, cups, toppings Variable: everything else O Fixed: refrigerators, workers Variable: everything else Fixed: refrigerators Variable: everything else O Fixed: refrigerators, malt, mix Variable: everything elseW I Y e b. If Mindy is producing 3 malts, what point would it be the most profitable for her? OA OB Oc OD QUESTION 31 c. If Mindy usually produces 3 malts but a there is a street festival outside of her shop making her proaduce more malts in the short run, what point will suitable for her business? Explain your choice. Hint: Consider only A or D. OcC OB O A OD QUESTION 32 d. If Mindy were praducing 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. O Increase VARIABLE costs O Increase FIXED costs O Decrease FIXED costs O Decrease VARIABLE costs 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 m O Decreasing O Increasing O Cannot tell O It varies
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