What is Brenda’s break-even price for a dozen of eggs? Explain how you found that answer.  What is Brenda’s shut-down price for a dozen of eggs? Explain how you found that answer.  If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, will Brenda make an economic profit? Explain how you determined your answer.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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  1. What is Brenda’s break-even price for a dozen of eggs? Explain how you found that answer. 
  2. What is Brenda’s shut-down price for a dozen of eggs? Explain how you found that answer. 
  3. If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, will Brenda make an economic profit? Explain how you determined your answer. 
Table 4.a.
Dozens
Fixed
Total Cost
Variable
Average
Variable Costs Total Costs
per dozen
Average
of eggs
Cost
Costs
per dozen
$3.35
$3.35
n/a
n/a
n/a
10
$3.35
$10.50
$7.15
$0.72
$1.05
20
$3.35
$16.40
$13.05
$0.65
$0.82
Page 4 of 5
Unit 8 [BU224 Assignment Template]
Dozens
Fixed
Total Cost
Variable
Average
Variable Costs Total Costs
per dozen
Average
of eggs
Cost
Costs
per dozen
30
$3.35
$23.10
$19.75
$0.66
$0.77
40
$3.35
$30.00
$26.65
$0.67
$0.75
50
$3.35
$36.50
$33.15
$0.66
$0.73
60
$3.35
$48.00
$44.65
$0.74
$0.80
70
$3.35
$64.40
$61.05
$0.87
$0.92
80
$3.35
$80.00
$76.65
$0.96
$1.00
90
$3.35
$135.00
$131.65
$1.46
$1.50
a. What is Brenda's break-even price for a dozen of eggs? Explain how you found that
answer.
b. jWhjat is Brenda's shut-down price for a dozen of eggs? Explain how you found that
jajswer.
Transcribed Image Text:Table 4.a. Dozens Fixed Total Cost Variable Average Variable Costs Total Costs per dozen Average of eggs Cost Costs per dozen $3.35 $3.35 n/a n/a n/a 10 $3.35 $10.50 $7.15 $0.72 $1.05 20 $3.35 $16.40 $13.05 $0.65 $0.82 Page 4 of 5 Unit 8 [BU224 Assignment Template] Dozens Fixed Total Cost Variable Average Variable Costs Total Costs per dozen Average of eggs Cost Costs per dozen 30 $3.35 $23.10 $19.75 $0.66 $0.77 40 $3.35 $30.00 $26.65 $0.67 $0.75 50 $3.35 $36.50 $33.15 $0.66 $0.73 60 $3.35 $48.00 $44.65 $0.74 $0.80 70 $3.35 $64.40 $61.05 $0.87 $0.92 80 $3.35 $80.00 $76.65 $0.96 $1.00 90 $3.35 $135.00 $131.65 $1.46 $1.50 a. What is Brenda's break-even price for a dozen of eggs? Explain how you found that answer. b. jWhjat is Brenda's shut-down price for a dozen of eggs? Explain how you found that jajswer.
Expert Solution
Step 1

It is possible to make money by selling a product, but only after subtracting the expenses of the materials and labour utilised, plus any potential gains or losses from that sale. Explicit and opportunity expenses are deducted from revenues while calculating economic profit.

As an implicit cost, opportunity costs are subject to change based on various assumptions and circumstances.

IMPORTANT 

There are two types of economic profit: explicit and opportunity cost.

In business, opportunity costs are the revenues that a company forgoes because of a decision to pursue one alternative over another.

It is not necessary to disclose economic profit for internal analysis.

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