Cost and Revenue Schedules for Tucker Tomato Farm, Inc. OUIPUI TUIAL PRICE MARGINAL AVERAGE AVERAGE PRUHIS (TONS PER MONTH) COST PER TON COST VARIABLE COST TOTAL COST (MONTHLY) $1,000 $500 1 1,200 500 2 1,350 500 3 1,550 500 4 1,900 500 5 2,300 500 2,750 500 7 3,250 500 8. 3,800 500 4,400 500 10 5,150 500 |||
The accompanying table presents the expected cost and revenue
data for the Tucker Tomato Farm. The Tuckers produce tomatoes
in a greenhouse and sell them wholesale in a
a. Fill in the firm’s marginal cost,
average total cost, and profit schedules.
b. If the Tuckers are profit maximizers, how many tomatoes
should they produce when the market price is $500 per
ton? Indicate their profits.
c. Indicate the firm’s output level and maximum profit if the
market price of tomatoes increases to $550 per ton.
d. How many units would the Tucker Tomato Farm produce if
the price of tomatoes fell to $450 per ton? What would be
the firm’s profits? Should the firm stay in business? Explain.
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