You own a company that produces helmets. You are currently selling 100 helmets per week. Your average total cost of producing these helmets is $100. Recall ATC=TC/Q. A customer comes to your store and says he needs a helmet and will pay you $95 for it. Thus you need to produce the 101st helmet if you make the sale. Your average total cost if you produce 101 helmets is $99.95. Do you sell the helmet to the customer for $95?
You own a company that produces helmets. You are currently selling 100 helmets per week. Your average total cost of producing these helmets is $100. Recall ATC=TC/Q. A customer comes to your store and says he needs a helmet and will pay you $95 for it. Thus you need to produce the 101st helmet if you make the sale. Your average total cost if you produce 101 helmets is $99.95. Do you sell the helmet to the customer for $95?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
You own a company that produces helmets. You are currently selling 100 helmets per week. Your
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![](/static/compass_v2/shared-icons/check-mark.png)
Step 1
Quantity (Helmet) | ATV ($) |
100 | 100 |
101 | 99.95 |
If the price of a helmet is lower than the average total cost, it results in a loss. Thus, the condition for loss is:
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