sytabus 1143 tal1 2017 -Media in a Diverse Connect Flashcards Soll Sclence Exam

Question

sytabus 1143 tal1 2017 -Media in a Diverse Connect Flashcards Soll Sclence Exam 2 10 The data in the table below are the monthly average variable costs (AVC), average total costs (ATC), and marginal costs (MC) for Alpacky, a typical alpaca wool-manufacturing firm in Peru. The alpaca wool industry is competitive. Output (units of wool)(S AVC ATC MC 20.00 14.00 6.00 18 17.00 For each market price given below, give the profit-maximizing output quantity, and state whether Alpacky's profits are positive, negative, or zero. Also state whether Alpacky should produce or shut down in the short run Market Profit Qmax Produce in short run a $16.00 b. $18.00 c. $22.00 F3

Explanation / Answer

P

P

Q profit action 16 3 Negative because price is less than average total cost shut down because price is less than average variable cost 18 4 negative continue because price is greater than average variable cost 22 5 positive as P > ATC continue because it is profitable

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