The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that produces children's mittens in a competitive market. Smitten's Production Costs Quantity (pairs of mittens) Marginal Cost (dollars) $1.60 Average Total Cost (dollars) 25 $2.2 30 2.00 2.17 35 2.45 2.21 40 3.55 2.38 45 4.00 2.56 50 5.50 2.85 55 6.00 3.14 60 8.50 3.58 Instructions: In part a, enter your answer as a whole number. In parts b, c and d, round your answers to 2 decimal places. a. If the market price of children's mittens is $6.00 per pair, how many pairs of children's mittens should Smitten produce per week to maximize its profits? 6 pairs of mittens b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens? $4 c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of mittens? %24

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The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that
produces children's mittens in a competitive market.
Smitten's Production Costs
Marginal Cost
(dollars)
$1.60
Quantity (pairs of
Average Total Cost
|(dollars)
$2.2
mittens)
25
30
2.00
2.17
35
2.45
2.21
40
3.55
2.38
45
4.00
2.56
50
5.50
2.85
55
6.00
3.14
60
8.50
3.58
Instructions: In part a, enter your answer as a whole number. In parts b, c and d, round your answers to 2 decimal places.
a. If the market price of children's mittens is $6.00 per pair, how many pairs of children's mittens should Smitten produce per week to
maximize its profits?
6 pairs of mittens
b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens?
c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of
mittens?
%24
%24
Transcribed Image Text:The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten, a perfectly competitive firm that produces children's mittens in a competitive market. Smitten's Production Costs Marginal Cost (dollars) $1.60 Quantity (pairs of Average Total Cost |(dollars) $2.2 mittens) 25 30 2.00 2.17 35 2.45 2.21 40 3.55 2.38 45 4.00 2.56 50 5.50 2.85 55 6.00 3.14 60 8.50 3.58 Instructions: In part a, enter your answer as a whole number. In parts b, c and d, round your answers to 2 decimal places. a. If the market price of children's mittens is $6.00 per pair, how many pairs of children's mittens should Smitten produce per week to maximize its profits? 6 pairs of mittens b. When the market price is $6.00, what is Smitten's average total cost at the profit-maximizing quantity of children's mittens? c. What are Smitten's weekly profits if the market price is $6.00 per pair and the firm produces the profit-maximizing quantity of mittens? %24 %24
d. What are Smitten's weekly profits if the market price is $5.50 per pair and the firm produces the profit-maximizing quantity of
mittens?
e. The price at which Smitten would earn a normal profit is where:
O marginal cost equals marginal revenue at the minimum of marginal cost.
O average cost equals average revenue at the minimum of average cost.
O marginal cost equals average cost at the minimum of average cost.
O marginal cost equals average cost.
Transcribed Image Text:d. What are Smitten's weekly profits if the market price is $5.50 per pair and the firm produces the profit-maximizing quantity of mittens? e. The price at which Smitten would earn a normal profit is where: O marginal cost equals marginal revenue at the minimum of marginal cost. O average cost equals average revenue at the minimum of average cost. O marginal cost equals average cost at the minimum of average cost. O marginal cost equals average cost.
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