Answered: You and the other hamburger shops that…

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

You and the other hamburger shops that just opened in your area are all selling the same basic hamburgers. Every other shop is selling their hamburgers for $2.00 per hamburger. You are now a price taker in a perfectly competitive market where the price of a hamburger is $2.00. (fill it ou the revenue and profit table).

Based on your current quantities and costs, can you sell a hamburger for $2.00 and still make a profit?

Explain your answer using information from the table.

# of
Hamburgers
Total Average Total
Cost
Average
Variable Cost
Marginal
Cost
Variable
Fixed
Costs
Costs
Costs
1,000
$500
$5,000
$5,500
2,500
$1,000
$5,000
$6,000
4,000
$1,400
$5,000
$6,400
9,000
$2,400
$5,000
$7,400
13,000
$3,400
$5,000
$8,400
20,000
$10,000
$5,000
$15,000
45,000
$31,250
$5,000
$36,250

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