A computer company produces affordable, easy to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss? If the firm sells the computers for $300, is it making a profit or a loss? How big is the profit or loss?
A computer company produces affordable, easy to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh. Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss? If the firm sells the computers for $300, is it making a profit or a loss? How big is the profit or loss?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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41. A computer company produces affordable, easy to-use home computer systems and has fixed costs of $250. The marginal cost of producing computers is $700 for the first computer, $250 for the second, $300 for the third, $350 for the fourth, $400 for the fifth, $450 for the sixth, and $500 for the seventh.
- Create a table that shows the company’s output, total cost, marginal cost, average cost, variable cost, and average variable cost.
- At what
price is the zero-profit point? At what price is the shutdown point? - If the company sells the computers for $500, is it making a profit or a loss? How big is the profit or loss?
- If the firm sells the computers for $300, is it making a profit or a loss? How big is the profit or loss?
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