100 90 80 ATC 70 50 30 AVC 20 MC 10 + 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans) PRICE (Dollars per pan) 40 For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Profit Price Quantity Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars per pan) (Dollars) (Dollars) (Pans) (Dollars) 25.00 10,000 1,600,000 70.00 5,000 1,600,000 100.00 1,600,000 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 $1,600,000 per day. In other words, if it shuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease)
100 90 80 ATC 70 50 30 AVC 20 MC 10 + 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pans) PRICE (Dollars per pan) 40 For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) Profit Price Quantity Total Revenue Fixed Cost Variable Cost (Dollars) (Dollars per pan) (Dollars) (Dollars) (Pans) (Dollars) 25.00 10,000 1,600,000 70.00 5,000 1,600,000 100.00 1,600,000 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 $1,600,000 per day. In other words, if it shuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:100
90
80
ATC
70
50
30
AVC
20
MC
10
+
0
0
5
10
15
20
25
30
35
40
45
50
QUANTITY (Thousands of pans)
PRICE (Dollars per pan)
40
![For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that
quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down,
it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.)
Profit
Price
Quantity
Total Revenue
Fixed Cost
Variable Cost
(Dollars)
(Dollars per pan)
(Dollars)
(Dollars)
(Pans)
(Dollars)
25.00
10,000
1,600,000
70.00
5,000
1,600,000
100.00
1,600,000
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 $1,600,000 per day. In other words, if it
shuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ccf583b-3141-45e1-ad26-60f361ecbb8d%2F0585a896-3c1d-4855-b339-8d3e742cd158%2F0wyrnlc.png&w=3840&q=75)
Transcribed Image Text:For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that
quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down,
it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.)
Profit
Price
Quantity
Total Revenue
Fixed Cost
Variable Cost
(Dollars)
(Dollars per pan)
(Dollars)
(Dollars)
(Pans)
(Dollars)
25.00
10,000
1,600,000
70.00
5,000
1,600,000
100.00
1,600,000
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 $1,600,000 per day. In other words, if it
shuts down, the firm would suffer losses of $1,600,000 per day until its fixed costs end (such as the expiration of a building lease)
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