Subject eco The table below shows the daily costs of Cathy's Corn Stand. Cathy sells her corn cobs in a perfectly competitive market.Cathy's Corn Stand's Production CostsQuantity (corn cobs) AVC (dollars)Costs and Revenues (dollars)5.004.504.003.50€ 3.002.50a. Draw Cathy's marginal cost (MC) curve.Instructions: Use the tool provided "MC" to plot the curve point by point (8 points total). Points for average variable and average totalcost are rounded to the nearest $0.25 in the graph.2.001.501.000.5020.0030.0040.0050.0060.0070.0080.0090.0002.252.001.811.701.671.681.751.86ATC (dollars)3.502.832.442.202.08Cathy's Corn Stand's Production CostsQuantity (corn cobs)MCATC2.042.062.14AVC10 20 30 40 50 60 70 80 90 100ToolsMC (dollars)2.001.501.251.251.501.752.252.75MC0 Instructions: In part b, enter your answer as a whole number. In part c, round your answer to two decimal places. If you are entering anegative number include a minus sign.b. If the market price of corn is $1.75 per corn cob, in the short run how much corn should Cathy produce each day to maximize profits?70 corn cobs per dayc. What are Cathy's profits/losses per day if she produces the profit-maximizing quantity of corn in the short run (losses are expressedas a negative number)?d. In the short run, assuming nothing else changes, Cathy shouldO produce the same quantity of corn per day.O produce a greater quantity of corn per day.O shut down, because the market price is above the AVC.O produce a lower quantity of corn per day.e. If the short-run price of corn falls to $1.25 per corn cob, Cathy shouldO produce a lower quantity of corn per day.O produce a greater quantity of corn per day.O shut down, because the market price is below the AVC.O produce the same quantity of corn per day.

Hi, since you require answers for sub-parts c, d and e we are providing solutions only for those…

c. What are Cathy's profits/losses per day if she produces the profit-maximizing quantity of corn in the short run (losses are expressed as a negative number)? d. In the short run, assuming nothing else changes, Cathy should O produce the same quantity of corn per day. O produce a greater quantity of corn per day. O shut down, because the market price is above the AVC. O produce a lower quantity of corn per day. e. If the short-run price of corn falls to $1.25 per corn cob, Cathy should O produce a lower quantity of corn per day. O produce a greater quantity of corn per day. O shut down, because the market price is below the AVC. O produce the same quantity of corn per day.

c. What are Cathy's profits/losses per day if she produces the profit-maximizing quantity of corn in the short run (losses are expressed as a negative number)? d. In the short run, assuming nothing else changes, Cathy should O produce the same quantity of corn per day. O produce a greater quantity of corn per day. O shut down, because the market price is above the AVC. O produce a lower quantity of corn per day. e. If the short-run price of corn falls to $1.25 per corn cob, Cathy should O produce a lower quantity of corn per day. O produce a greater quantity of corn per day. O shut down, because the market price is below the AVC. O produce the same quantity of corn per day.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Subject eco

The table below shows the daily costs of Cathy's Corn Stand. Cathy sells her corn cobs in a perfectly competitive market.
Cathy's Corn Stand's Production Costs
Quantity (corn cobs) AVC (dollars)
Costs and Revenues (dollars)
5.00
4.50
4.00
3.50
€ 3.00
2.50
a. Draw Cathy's marginal cost (MC) curve.
Instructions: Use the tool provided "MC" to plot the curve point by point (8 points total). Points for average variable and average total
cost are rounded to the nearest $0.25 in the graph.
2.00
1.50
1.00
0.50
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
0
2.25
2.00
1.81
1.70
1.67
1.68
1.75
1.86
ATC (dollars)
3.50
2.83
2.44
2.20
2.08
Cathy's Corn Stand's Production Costs
Quantity (corn cobs)
MC
ATC
2.04
2.06
2.14
AVC
10 20 30 40 50 60 70 80 90 100
Tools
MC (dollars)
2.00
1.50
1.25
1.25
1.50
1.75
2.25
2.75
MC
0

Instructions: In part b, enter your answer as a whole number. In part c, round your answer to two decimal places. If you are entering a
negative number include a minus sign.
b. If the market price of corn is $1.75 per corn cob, in the short run how much corn should Cathy produce each day to maximize profits?
70 corn cobs per day
c. What are Cathy's profits/losses per day if she produces the profit-maximizing quantity of corn in the short run (losses are expressed
as a negative number)?
d. In the short run, assuming nothing else changes, Cathy should
O produce the same quantity of corn per day.
O produce a greater quantity of corn per day.
O shut down, because the market price is above the AVC.
O produce a lower quantity of corn per day.
e. If the short-run price of corn falls to $1.25 per corn cob, Cathy should
O produce a lower quantity of corn per day.
O produce a greater quantity of corn per day.
O shut down, because the market price is below the AVC.
O produce the same quantity of corn per day.

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