Latoya runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,500 for the first thousand posters, $1,200 for the second thousand, and then $800 for each additional thousand posters. Instructions: Enter your answers rounded to two decimal places. a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? What if she prints 2,000 posters? $ What if she prints 10,000 posters? b. What is her ATC per poster if she prints 1,000? What if she prints 2,000? $ What if she prints 10,000? c. If the market price fell to 75 cents per poster, would there be any output level at which Latoya would not shut down production immediately? (Click to select)

Latoya runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,500 for the first thousand posters, $1,200 for the second thousand, and then $800 for each additional thousand posters. Instructions: Enter your answers rounded to two decimal places. a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? What if she prints 2,000 posters? $ What if she prints 10,000 posters? b. What is her ATC per poster if she prints 1,000? What if she prints 2,000? $ What if she prints 10,000? c. If the market price fell to 75 cents per poster, would there be any output level at which Latoya would not shut down production immediately? (Click to select)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose that Roots' marginal cost of a jacket is a constant $75.00 and the total fixed cost at one of its stores is $2,000 a day. This store sells 25 jackets a day, which is its profit-maximizing number of jackets. Then the stores nearby start to advertise their jackets. The Roots store now spends $1,000 a day advertising its jackets, and its profit-maximizing number of jackets sold jumps to 75 a day. What is this store's average total cost of a jacket sold before the advertising begins and after the advertising begins. >>> Answer to 2 decimal places. Can you say what happens to the price of a Roots jacket, Roots' markup, and Roots' economic profit? Before the advertising begins, the average total cost of a jacket sold in this store is $ After the advertising begins, the average total cost of a jacket sold in this store is $ If the nearby firms' advertising decreases the demand for Roots' jackets and makes the demand more elastic, the price of a Roots' jacket If Roots' advertising…
In tourist towns such as Myrtle Beach, some businesses stay open year round while others close. How do fixed and variable costs affect their decision to close or stay open? (Review "The Shutdown Point" chapter 8). Write your response below. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B I US Paragraph V Arial P 동≡ EE X² X₂ 旺图 ‹› † {} 23 (+) V 10pt »¶¶ ✓ !!! F V A V "Ω Θ Ix A
Tomas is the general manager for a local automated car wash. The market he operates is perfectly competitive. Every car wash in the area is charging $7 for a car wash, which is also the marginal cost per wash. What will happen to Tomas’ profits if he changes his price to $8. Why? What about the price of $5? What is his profit-maximizing price?
Help me please
Assume that the most efficient production technology available for making vitamin pills has the cost structure given in the following table. Note that output is measured as the number of bottles of vitamins produced per day and that costs include a normal profit. Output TC MC ATC 50,800 $170,000 $0.60 100,800 220,000 1.10 150,800 257,500 1.71 200,800 365,500 2.45 Instructions: Enter your answers rounded to two decimal places. a. What is ATC per unit for each level of output listed in the table? Enter your answers in the table above. b. Are there economies of scale in production? Yes c. Suppose that the market price for a bottle of vitamins is $1.71. At that price the total market quantity demanded is 301,600,000 bottles. How many firms will be in this industry? firm(s) d. Suppose that, instead, the market quantity demanded at a price of $1.71 is only 150,800. How many firms will be in this industry? firm(s) e. Review your answers to parts b, c, and d. Does the level of demand determine…
Only typed answer
Calvin grows beautiful orchids. His total fixed cost is $90 a day, and his average variable cost is $2 a plant. Few people know about Calvin's Orchids and he is maximizing his profit by selling 18 orchids a day for $7 a plant. Calvin thinks that if he spends $20 a day on advertising, he can increase his market and sell 48 orchids a day for $7 a plant. If Calvin advertises will his average total cost increase or decrease at the quantity produced? If Calvin advertises and as a result he sells 48 orchids a day for $7 a plant, his O A. average total cost decreases if total cost decreases, and increases if total cost increases average total cost does not change at the quantity produced O B. O C. average total cost increases at the quantity produced O D. average total cost decreases at the quantity produced
3. Gazelle Corp, a sports shoe firm, is currently selling 800 pairs of a certain shoe per month. It is currently charging a price of £40, but this has recently been reduced from £45, because sales were only reaching 750 units per month. Its total costs are £28,000 per month, and these have risen £1500 due to the increase in sales. a) Derive the cost and demand functions for the firm, assuming these are both linear. b) Calculate the price elasticity of demand at the current price. c) Comment on the firm's existing strategy in terms of profit maximization, without doing any calculations. d) Calculate the profit-maximizing price and output. e) Calculate the amount of profit that the firm is currently foregoing.
A new production technology for making vitamins is invented by a college professor who decides not to patent it. Thus, it is available for anybody to copy and use. The TC per bottle for production up to 100,000 bottles per day is given in the following table. Output 25,000 50,000 75,000 100,000 TC $85,000.00 105,000.00 110,000.00 115,000.00 ATC Instructions: In part a, round your answers to 2 decimal places. In parts cand d enter your answers as a whole number. a. What is ATC for each level of output listed in the table? Enter your answers in the table above. b. Suppose that for each 25,000-bottle-per-day Increase in production above 100,000 bottles per day, TC increases by $5,000 (so that, for instance, 125,000 bottles per day would generate total costs of $120,000 and 150,000 bottles per day would generate total costs of $125,000). Are there economies of scale at all levels of output? (Click to select) c. Suppose that the price of a bottle of vitamins is $2.03. At that price, the…
Hayfever Farms is an 80-acre hay farm in Colorado. The owners are considering changing the farm's name to Blissful Acres and growing strawberries instead of hay. Use the table of marginal cost (MC) and marginal revenue (MR) to answer two questions. Number of acres MC $ MR $ (hay) MR $ (strawberries) 10 320 730 5600 20 200 730 5600 30 540 730 5600 40 730 730 5600 50 1200 730 5600 60 3200 730 5600 70 5600 730 5600 80 6700 730 5600 If they continue to only grow hay, how many acres should Hayfever Farms devote to growing hay in order to maximize profits? acres of hay: acres If the owners decide to only grow strawberries, how many acres should Blissful Acres devote to growing strawberries in order to maximize profits? acres of strawberries:
The data in the table represents annual costs and revenue for Aurora’s Orchid Emporium. Aurora works 60 hours a week at the Orchid Emporium. Aurora owns the building that houses the Orchid Emporium, and if she closed the shop, she could rent out the building for $40,000 per year go to work for Acme Flowers, and earn a salary of $30,000 per year. Calculate the economic profit and economic cost for Aurora’s Orchid Emporium. Are these figures the same as the accounting cost and accounting profit? Explain. Wages paid: $22,000 Interest Paid on Loans: $8,000 Other Expenditures for Factors: $26,000 of Production Total Revenue: $115,000.
Solve for the missing items in the table. Use the space provided for your answer and complete solution