The price of a case of ball bearings is $60. Seeing that he can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is 5 (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True O False Vaguely remembering his introductory economics course, the company's chief financial officer tells the CEO it is better to produce 1 case of bll bearings, because marginal revenue equals marginal cost at that quantity. At this level of production, the firm's profit is S . (Note: If the firm suffers a loss, enter a negative number in this cell.). True or False: This is the best decision the firm can make. O True O Falre

The price of a case of ball bearings is $60. Seeing that he can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is 5 (Note: If the firm suffers a loss, enter a negative number in this cell.) True or False: This was a wise decision. True O False Vaguely remembering his introductory economics course, the company's chief financial officer tells the CEO it is better to produce 1 case of bll bearings, because marginal revenue equals marginal cost at that quantity. At this level of production, the firm's profit is S . (Note: If the firm suffers a loss, enter a negative number in this cell.). True or False: This is the best decision the firm can make. O True O Falre

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. Problems and Applications Q4
Ball Bearings, Inc., faces costs of production as follows:
Total Fixed Costs Total Variable Costs
Quantity
(Dollars)
(Dollars)
120
1
120
60
2
120
80
3
120
100
4
120
140
120
200
120
320
Complete the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost
at each level of production.
Marginal Cost
(Dollars)
Average Fixed Cost
(Dollars)
Total Cost
Average Variable Cost
(Dollars)
Average Total Cost
Quantity (Dollars)
(Dollars)
3
4
6

The price of a case of ball bearings is $60. Seeing that he can't make a profit, the company's chief executive officer (CEO) decides to shut down
operations.
The firm's profit in this case is s
(Note: If the firm suffers a loss, enter a negative number in this cell.)
True or False: This was a wise decision.
True
O False
Vaguely remembering his introductory economics course, the company's 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.
At this level of production, the firm's profit is S
(Note: If the firm suffers a loss, enter a negative number in this cell.).
True or False: This is the best decision the firm can make.
True
False

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