Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars )0 1200 1 120 60 2 120 80 3 120 100 4 120 140 5 120 200 6 120 320 Complete the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) ( Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $60. Seeing that the company can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is. (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True False Vaguely remembering an introductory economics course, the chief financial officer tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. At this level of production, the firm's profit is. (Note: If the firm suffers a loss, enter a negative number in this cell.). True or False: This is the best decision the firm can make. True False
Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars )0 1200 1 120 60 2 120 80 3 120 100 4 120 140 5 120 200 6 120 320 Complete the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) ( Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $60. Seeing that the company can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is. (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True False Vaguely remembering an introductory economics course, the chief financial officer tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. At this level of production, the firm's profit is. (Note: If the firm suffers a loss, enter a negative number in this cell.). True or False: This is the best decision the firm can make. True False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars
) 0 120 0 1 120 60 2 120 80 3 120 100 4 120 140 5 120 200 6 120 320 Complete the following table by calculating the
company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of
production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) (
Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $60. Seeing that the company
can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this
case is. (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True
False Vaguely remembering an introductory economics course, the chief financial officer tells the CEO it is better to
produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. At this level of
production, the firm's profit is. (Note: If the firm suffers a loss, enter a negative number in this cell.). True or False: This is
the best decision the firm can make. True False
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