Q9ABC is a small business producing instructional modules for disabled children in publicschools. The modules produced by ABC are not differentiated and the market price is$1,300 per module. ABC operates in a small office that rents for $600 a month and leasescomputer equipment that costs $480 per month. The chart lists other cost of production.Output (Q) Fixed(Instructional CostModulesPer month)012345678910Variable Total Average AverageCostCostFixedVariable(TC)Cost(AFC)(FC) (VC)1,0804001,3501,9002,5004,1005,4007,3001,4802,4304,28010,880216135Cost(AVC)475AverageTotalCost(ATC)965MarginalCost(MC)4004507001) Complete the chart and plot the following graphs: AFC, AVC, ATV, MC. Be sureto label axis and graphs.2) How many instructional modules ABC will produce, assuming it is profit-maximizer? Explain your answer and show that on the graph.3) Determine ABC's profit and shade the profit on the graph.4) Given the level of ABC's profit, what are your predictions about profit underthese market conditions in the long run, explain. Use a separate sheet (landscape)to show the firms and market dynamic relationships.

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ABC is a small business producing instructional modules for disabled children in public schools. The modules produced by ABC are not differentiated and the market price is $1,300 per module. ABC operates in a small office that rents for $600 a month and leases computer equipment that costs $480 per month. The chart lists other cost of production. Output (Q) Fixed Variable Total Average Average Average Marginal (Instructional Cost Cost Fixed Variable Total Modules (FC) (TC) Cost Cost Per month) (AVC) (ATC) 0 1 2 3 4 5 6 7 8 9 10 1,080 Cost (VC) 400 1,350 1,900 2,500 4,100 5,400 7,300 1,480 2,430 4,280 10,880 Cost (AFC) 216 135 475 965 Cost (MC) 400 450 2) How many instructional modules ABC will produce, assuming it is profit- maximizer? Explain your answer and show that on the graph. 700 1) Complete the chart and plot the following graphs: AFC, AVC, ATV, MC. Be sure to label axis and graphs. 3) Determine ABC's profit and shade the profit on the graph. 4) Given the level of ABC's profit, what are your predictions about profit under these market conditions in the long run, explain. Use a separate sheet (landscape) to show the firms and market dynamic relationships.

ABC is a small business producing instructional modules for disabled children in public schools. The modules produced by ABC are not differentiated and the market price is $1,300 per module. ABC operates in a small office that rents for $600 a month and leases computer equipment that costs $480 per month. The chart lists other cost of production. Output (Q) Fixed Variable Total Average Average Average Marginal (Instructional Cost Cost Fixed Variable Total Modules (FC) (TC) Cost Cost Per month) (AVC) (ATC) 0 1 2 3 4 5 6 7 8 9 10 1,080 Cost (VC) 400 1,350 1,900 2,500 4,100 5,400 7,300 1,480 2,430 4,280 10,880 Cost (AFC) 216 135 475 965 Cost (MC) 400 450 2) How many instructional modules ABC will produce, assuming it is profit- maximizer? Explain your answer and show that on the graph. 700 1) Complete the chart and plot the following graphs: AFC, AVC, ATV, MC. Be sure to label axis and graphs. 3) Determine ABC's profit and shade the profit on the graph. 4) Given the level of ABC's profit, what are your predictions about profit under these market conditions in the long run, explain. Use a separate sheet (landscape) to show the firms and market dynamic relationships.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 3MC

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