Overview
- PLEASE DO APA STYLE - USE POWERPOINTS AS REFERENCE - PLEASE USE ATTACHMENT "Exercise 4" FOR FULL QUESTIONS. IT HAS IMAGES I COULD NOT PASTE
BUS 724
EXERCISE 4
Total Points = 5
Section I
Len’s body board factory pays $60 a day for equipment and $200 a day to each student it hires. The table sets out Len’s total product schedule.
Question 1 (1 point)
Construct Len’s total variable cost and total cost schedules. What does the difference between total cost and total variable cost at each output equal?
Question 2 (1 point)
Construct the average fixed cost, average variable cost, and average total cost schedules and the marginal cost schedule.
Section II
The table below shows the demand schedule for Lin’s Fortune Cookies. The second table shows some cost data for Lin’s. (Hint: Make a sketch of Lin’s short-run cost curves.)
Question 3 (1.5 point)
At a market price of $35.20 a batch, what quantity does Lin’s produce and what is the firm’s economic profit in the short run?
Question 4 (1.5 point)
At a market price of $83 a batch, what quantity does Lin’s produce and what is the firm’s economic profit in the short run? Do firms enter or exit the market and what is Lin’s economic profit in the long run?
- PLEASE DO APA STYLE - USE POWERPOINTS AS REFERENCE - PLEASE USE ATTACHMENT "Exercise 4" FOR FULL QUESTIONS. IT HAS IMAGES I COULD NOT PASTE