120 168 21 42 63 84 (c) Compute the average total cost (ATC), marginal cost (MC)

Question

120 168 21 42 63 84 (c) Compute the average total cost (ATC), marginal cost (MC) and demand curve values for the firm below. otal cost (per day)$50 27 31 25 total cost 13 21 21 21 21 21 21 (d) What is the profit-maxdimizing rate of output? 4 units (e) Should the producer stay in business in the short run? O Not enough informatiorn 8 Yes O No fi What is the size of the loss if production continues? Instructions: Enter your response as a whole positive number loss (g) How much is lost if the firm shuts down? Instructions: Enter your response as a whole positive number 50 loss

Explanation / Answer

ANSWER: part f as requested by you.

f) Size of loss = total revenue of 8 days - total cost of 8 days

total revenue of 8 days including day 0 = $0 + $21 + $42 + $63 + $84 + $105 + $126 + $147 + $168 = $756

total cost of 8 days including day 0 = $50 + $55 + $62 + $75 + $96 + $125 + $162 + $203 + $248 = $1,076

size of loss = $756 - $1,056 = -$320

so the size of loss is $320.

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