Ball Bearings, Inc., faces costs of production as follows:
a. Calculate the company’s average fixed cost,
and marginal cost at each level of production.
b. The price of a case of ball bearings is $50. Seeing that he can’t make a profit, the
chief executive officer (CEO) decides to shut down operations. What is the firm’s
c. Vaguely remembering his introductory economics course, the chief financial officer
tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue
equals marginal cost at that quantity. What is the firm’s profit/loss at that level of
production? Was this the best decision? Explain
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