Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q = 12 ? (approximate to one decimal) ATC = AVC = AFC = What is TC, VC and FC at q = 12? Show your calculations. b) If the price of olive oil is $3.50, how much oil would a price - taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break - even price/cost of a pound of olive oil? d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sell at this price? c 5) Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal) ATC= AVC- What is TC, VC and FC at q-12? Show your calculations. AFC= ATC AVE quantity b) If the price of olive oil is $3.50, how much oil would a price-taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break-even price/cost of a pound of olive oil?
Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q = 12 ? (approximate to one decimal) ATC = AVC = AFC = What is TC, VC and FC at q = 12? Show your calculations. b) If the price of olive oil is $3.50, how much oil would a price - taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break - even price/cost of a pound of olive oil? d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sell at this price? c 5) Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal) ATC= AVC- What is TC, VC and FC at q-12? Show your calculations. AFC= ATC AVE quantity b) If the price of olive oil is $3.50, how much oil would a price-taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break-even price/cost of a pound of olive oil?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:Examine the graph below that presents costs for a
typical olive oil producer and answer questions: a) What
is the ATC, AVC and AFC at q = 12? (approximate to
one decimal) ATC = AVC = AFC = What is TC, VC and
FC at q = 12? Show your calculations. b) If the price of
olive oil is $3.50, how much oil would a price - taking
firm be willing to produce and sell? Would the firm be
able to make a profit at this price? If not, would there be
a loss? Calculate & indicate profit/loss box on the graph
above. c) According to the graph, what is the break-
even price/cost of a pound of olive oil? d) If the olive oil
prices rise to $6 per kilogram, would the firm make a
profit? How much it would be willing to sell at this
price?
ง
5) Examine the graph below that presents casts for a typical olive oil producer and answer questions:
a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal)
ATC=
AVC-
What is TC, VC and FC at q-12? Show your calculations.
AFC=
MC
ATC
AVE
Quantity
18
b) If the price of olive oil is $3.50, how much oil would a price-taking firm be willing to produce and sell? Would
the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box
on the graph above.
c) According to the graph, what is the break-even price/cost of a pound of olive oil?
d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sell
at this price?
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