You plan to open a donut shop. After doing some research and planning, you have created the table below to help you estimate how much to charge for your donuts to make a profit. You already identified various amounts of donuts you could potentially produce as well as the related variable and fixed costs.

Step One

Then, calculate and enter the remaining information in the chart.

Step Two

Graph the Average Total Costs, Average Variable Costs, and Marginal Costs on the same graph.

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Step Three

Answer the following questions in your Word document and submit your completed assignment.

• What is the lowest price you could charge for a donut and still make a profit?
• How many donuts would you need to produce?
• How much will your group sell your donuts for?
• Now, look up a couple of local donut shops. Compare their prices with the prices that you decided on as a group. How do your prices compare with theirs? Would you be able to compete with them? Why or why not? Explain your reasoning.

# of Donuts	Variable Costs	Fixed Costs	Total Costs	Average Total Cost	Average Variable Cost	Marginal Cost
2,000	$2,000	$10,000	$12,000
3,000	$2,500	$10,000	$12,500
5,000	$3,500	$10,000	$13,500
10,000	$4,000	$10,000	$14,000
15,000	$7,000	$10,000	$17,000
25,000	$20,000	$10,000	$30,000
50,000	$80,000	$10,000	$90,000