At a market price of $83 a batch, what quantity does Lin’s produce and what is the firm’s economic profit in the short run? Do firms enter or exit the market and what is Lin’s economic profit in the long run?
At a market price of $83 a batch, what quantity does Lin’s produce and what is the firm’s economic profit in the short run? Do firms enter or exit the market and what is Lin’s economic profit in the long run?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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At a market
Transcribed Image Text:The demand schedule for Lin's Fortune Cookies is presented in the first table, while the second table provides cost data. Here's a detailed transcription and explanation:
### Demand Schedule Table
- **Columns:**
- **Price (dollars per batch):** Represents the price of each batch of fortune cookies.
- **Quantity demanded (batches per day):** Shows the number of batches demanded per day at each price level.
- **Data:**
- At $50 per batch, the quantities demanded are 0, 1, 2, 3, 4, 5, and 6 batches per day.
### Cost Data Table
- **Columns:**
- **Quantity (batches per day):** Number of batches produced per day.
- **AFC (Average Fixed Cost, dollars per batch):** Fixed cost per batch averaged over the quantity produced.
- **AVC (Average Variable Cost, dollars per batch):** Variable cost per batch averaged over the quantity produced.
- **ATC (Average Total Cost, dollars per batch):** Total cost per batch (sum of AFC and AVC) averaged over the quantity produced.
- **MC (Marginal Cost, dollars per batch):** The cost of producing an additional batch.
- **Data:**
- For 1 batch per day, AFC is $84.0, AVC is $51.00, ATC is $135, and MC is $37.
- For 2 batches per day, AFC is $42.0, AVC is $44.00, ATC is $86, and MC is $29.
- For 3 batches per day, AFC is $28.0, AVC is $39.00, ATC is $67, and MC is $27.
- For 4 batches per day, AFC is $21.0, AVC is $36.00, ATC is $57, and MC is $32.
- For 5 batches per day, AFC is $16.8, AVC is $35.20, ATC is $52, and MC is $40.
- For 6 batches per day, AFC is $14.0, AVC is $36.00, ATC is $50, and MC is $57.
- For 7 batches per day, AFC is $12.0, AVC is $39.00, ATC
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