70 60 ATC 50 40 30 20 AVC MC O 10 5 10 15 20 25 30 35 40 45 50 (Thousands of jackets) ANT each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing tity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will e a profit, suffer a loss, or break even at each price. Price Quantity ollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? Shut down Shut down 10 20,000 Loss 20 10,000 Loss 32 5,000 Shut down Loss 40 Either 0 or 37,500 Produce Loss 50 40,000 Produce Loss 60 Either 0 or 42,500 Produce Loss COSTS (Dollars)
70 60 ATC 50 40 30 20 AVC MC O 10 5 10 15 20 25 30 35 40 45 50 (Thousands of jackets) ANT each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit. Assume when the price is exactly equal to the average variable cost, the firm is indifferent between producing zero jackets and the profit-maximizing tity. Also, indicate whether the firm will produce, shut down, or be indifferent between the two in the short run. Lastly, determine whether it will e a profit, suffer a loss, or break even at each price. Price Quantity ollars per jacket) (Jackets) Produce or Shut Down? Profit or Loss? Shut down Shut down 10 20,000 Loss 20 10,000 Loss 32 5,000 Shut down Loss 40 Either 0 or 37,500 Produce Loss 50 40,000 Produce Loss 60 Either 0 or 42,500 Produce Loss COSTS (Dollars)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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