The following table shows partial cost information of White T-shirt Manufacturing Company. The T-shirt market is a perfectly competitive market. Quantity Total fixed cost Average variable cost $70 $70 $10 1 $70 $15 $70 $20 3 $70 $25 4 $70 $32 $70 $40 The market price of T-shirt is $60 each. At what quantity should the company produce to maximize profit/minimize loss? Explain A. your answer. Calculate the profit or loss of the company if it produces at the quantity that maximizes B. profit/minimize loss. Is the current situation in a long-run equilibrium? Explain you answer. C. At what quantity is the company's Efficient Scale? Explain your answer. D.
The following table shows partial cost information of White T-shirt Manufacturing Company. The T-shirt market is a perfectly competitive market. Quantity Total fixed cost Average variable cost $70 $70 $10 1 $70 $15 $70 $20 3 $70 $25 4 $70 $32 $70 $40 The market price of T-shirt is $60 each. At what quantity should the company produce to maximize profit/minimize loss? Explain A. your answer. Calculate the profit or loss of the company if it produces at the quantity that maximizes B. profit/minimize loss. Is the current situation in a long-run equilibrium? Explain you answer. C. At what quantity is the company's Efficient Scale? Explain your answer. D.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The following table shows partial cost information of White T-shirt Manufacturing Company. The T-shirt market is a
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Transcribed Image Text:The following table shows partial cost information of White T-shirt Manufacturing Company.
The T-shirt market is a perfectly competitive market.
Quantity
Total fixed cost
Average variable cost
$70
$70
$10
1
$70
$15
$70
$20
3
$70
$25
4
$70
$32
$70
$40
The market price of T-shirt is $60 each.
At what quantity should the company produce to maximize profit/minimize loss? Explain
A.
your answer.
Calculate the profit or loss of the company if it produces at the quantity that maximizes
B.
profit/minimize loss.
Is the current situation in a long-run equilibrium? Explain you answer.
C.
At what quantity is the company's Efficient Scale? Explain your answer.
D.
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