2. You are the manager of production at a firm that sells high performance road bikes. Your firm has the following average-total-cost schedule: Quantity 548 Bikes 549 Bikes Average Cost $245 $246 Your current level of production is 548 bikes, all of which have been sold. Someone calls desperate to buy a bike for a local race. The caller offers $800 for the bike. Should you accept the offer? Why or why not? Show your calculations for full credit.
2. You are the manager of production at a firm that sells high performance road bikes. Your firm has the following average-total-cost schedule: Quantity 548 Bikes 549 Bikes Average Cost $245 $246 Your current level of production is 548 bikes, all of which have been sold. Someone calls desperate to buy a bike for a local race. The caller offers $800 for the bike. Should you accept the offer? Why or why not? Show your calculations for full credit.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 32CTQ: How does fixed cost affect marginal cost? Why is this relationship important?
Related questions
Question
![2. You are the manager of production at a firm that sells high performance road bikes. Your
firm has the following average-total-cost schedule:
Quantity
548 Bikes
549 Bikes
Average Cost
$245
$246
Your current level of production is 548 bikes, all of which have been sold. Someone
calls desperate to buy a bike for a local race. The caller offers $800 for the bike. Should
you accept the offer? Why or why not? Show your calculations for full credit.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fff766d70-e7f4-4f35-897a-f41861e33962%2F0487d66a-1236-4076-aa40-486fd8fb8e88%2Fade8wilr_processed.png&w=3840&q=75)
Transcribed Image Text:2. You are the manager of production at a firm that sells high performance road bikes. Your
firm has the following average-total-cost schedule:
Quantity
548 Bikes
549 Bikes
Average Cost
$245
$246
Your current level of production is 548 bikes, all of which have been sold. Someone
calls desperate to buy a bike for a local race. The caller offers $800 for the bike. Should
you accept the offer? Why or why not? Show your calculations for full credit.
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