The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a perfectly competitive firm that produces novelty ear buds in a competitive market. The market price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 10 3.5 15 3 20 2.44 2.86 25 3.56 3 30 4.02 3.17 35 5.48 3.5 40 5.98 3.81 45 8.49 4.33
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a perfectly competitive firm that produces novelty ear buds in a competitive market. The market price of ear buds is $6.00 per pair. Buddies Production Costs Quantity MC ATC of Ear Buds ($) ($) 10 3.5 15 3 20 2.44 2.86 25 3.56 3 30 4.02 3.17 35 5.48 3.5 40 5.98 3.81 45 8.49 4.33
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 14CQ
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Question
![The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a perfectly competitive firm that
produces novelty ear buds in a competitive market. The market price of ear buds is $6.00 per pair.
Buddies Production Costs
Quantity
MC
ATC
of Ear Buds
($)
($)
10
3.5
15
3
20
2.44
2.86
25
3.56
3
30
4.02
3.17
35
5.48
3.5
40
5.98
3.81
45
8.49
4.33
Instructions: In part a, enter your answer as the closest given whole
imber.
a. If Buddies wants to maximize its profits, how many pairs of ear buds should it produce?
pairs
Instructions: In parts b-d, round your answers to 2 decimal places.
b. At the profit-maximizing quantity, what is the total cost of producing ear buds?
$
c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what is Buddies
weekly profit?
2$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F09726091-0417-4055-b240-2895ea40eb4f%2Ff5b67965-1ef8-41d6-a3da-4d2d78b3e036%2F4650h1m_processed.png&w=3840&q=75)
Transcribed Image Text:The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Buddies, a perfectly competitive firm that
produces novelty ear buds in a competitive market. The market price of ear buds is $6.00 per pair.
Buddies Production Costs
Quantity
MC
ATC
of Ear Buds
($)
($)
10
3.5
15
3
20
2.44
2.86
25
3.56
3
30
4.02
3.17
35
5.48
3.5
40
5.98
3.81
45
8.49
4.33
Instructions: In part a, enter your answer as the closest given whole
imber.
a. If Buddies wants to maximize its profits, how many pairs of ear buds should it produce?
pairs
Instructions: In parts b-d, round your answers to 2 decimal places.
b. At the profit-maximizing quantity, what is the total cost of producing ear buds?
$
c. If the market price for ear buds is $6 per pair, and Buddies produces the profit-maximizing quantity of ear buds, what is Buddies
weekly profit?
2$
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