Our firm’s accountants have put together the following table of costs. Generators Solar Panels Fixed Costs $2 million $2 million Variable Costs $2 million $2 million Revenue $3 million $5 million The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales 1. How is this firm doing as a whole? How profitable are the two products individually? 2. What would you recommend this firm do in the short run? 3. What about the long run?
Our firm’s accountants have put together the following table of costs. Generators Solar Panels Fixed Costs $2 million $2 million Variable Costs $2 million $2 million Revenue $3 million $5 million The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales 1. How is this firm doing as a whole? How profitable are the two products individually? 2. What would you recommend this firm do in the short run? 3. What about the long run?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 7PA
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Question
Our firm’s accountants have put together the following table of costs.
Generators | Solar Panels | |
Fixed Costs | $2 million | $2 million |
Variable Costs | $2 million | $2 million |
Revenue | $3 million | $5 million |
The accountants have assured us that there are no places to save money. We are at our profit maximizing quantities of each product. We are as efficient as any firm could possibly be. In answering the questions below, do not just say lower costs or increase sales
1. How is this firm doing as a whole? How profitable are the two products individually?
2. What would you recommend this firm do in the short run?
3. What about the long run?
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