Mondi Company produces party boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for R100 per thousand. The company has a total and marginal cost curve given by: TC = 3,000,000+ 0.001Q² MC = 0.002Q Q is measured in thousand box bundles per year. (a) Determine Mondi's profit maximizing quantity. (b) Calculate if the firm is earning a profit or a loss? (c) Based on the analysis above, should Mondi Company operate or shut down in the short-run?

Mondi Company produces party boxes that are sold in bundles of 1000 boxes. The market is highly competitive, with boxes currently selling for R100 per thousand. The company has a total and marginal cost curve given by: TC = 3,000,000+ 0.001Q² MC = 0.002Q Q is measured in thousand box bundles per year. (a) Determine Mondi's profit maximizing quantity. (b) Calculate if the firm is earning a profit or a loss? (c) Based on the analysis above, should Mondi Company operate or shut down in the short-run?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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