The following are cost data for four different size plants available to a competitive producer: Output 50 100 150 200 250 ACI $80 75 65 75 90 AC2 $95 80 60 80 100 AC3 $120 100 75 55 80 O a. The plant represented by AC1. O b. The plant represented by AC2. O c. The plant represented by AC3. O d. The plant represented by AC4. AC4 $150 120 100 75 90 Refer to the above information to answer this question. If the market price of this product is $80, which is the best size of plant? (Check at every price)

The following are cost data for four different size plants available to a competitive producer: Output 50 100 150 200 250 ACI $80 75 65 75 90 AC2 $95 80 60 80 100 AC3 $120 100 75 55 80 O a. The plant represented by AC1. O b. The plant represented by AC2. O c. The plant represented by AC3. O d. The plant represented by AC4. AC4 $150 120 100 75 90 Refer to the above information to answer this question. If the market price of this product is $80, which is the best size of plant? (Check at every price)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Kasey Puzzle, Inc. sells geography-based puzzles. Kasey currently sells 25,000 units a month for $40 each, has variable costs of $20 per unit, and fixed costs of $300,000. Kasey Puzzle is considering increasing the price of its units to $60 per unit. This will not affect costs, but demand is expected to drop 20%. Should Kasey Puzzle increase the price of its product? с Multiple Choice O O Yes, profit will increase $500,000. No, profit will decrease $500,000. No, profit will decrease $300,000. Yes; profit will increase $300,000.
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