JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 Q AC 18 1 20 16 14 2 15 12 12 10 1 3 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) 5, 2. AC ($/unit) 3.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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JYour business has the capacity to produce up to 5 units/week. The table
& graph below show average cost (AC) for different weekly production levels. Your
objective is to maximize profit each week.
Average Cost
22
20
AC
18
1
20
14
2
15
12
3
12
10
1
2
4
4
13
Quantity
15
Your product sells in the market for $21/unit, and you can sell as many units at that
price as you can bring to market. You know from your economics training that deciding
how much to produce should rely on marginal concepts like marginal cost (MC). So,
based on the AC table above, create a table that shows the MC of each unit. (Assume
that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit,
determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your
answer. (Your answer needs to be based on MC and being able to sell each unit for $21.)
AC ($/unit)
Transcribed Image Text:JYour business has the capacity to produce up to 5 units/week. The table & graph below show average cost (AC) for different weekly production levels. Your objective is to maximize profit each week. Average Cost 22 20 AC 18 1 20 14 2 15 12 3 12 10 1 2 4 4 13 Quantity 15 Your product sells in the market for $21/unit, and you can sell as many units at that price as you can bring to market. You know from your economics training that deciding how much to produce should rely on marginal concepts like marginal cost (MC). So, based on the AC table above, create a table that shows the MC of each unit. (Assume that there are no fixed costs, so total costs are zero if Q=0.) Based on MC for each unit, determine the profit-maximizing quantity to produce and sell. BRIEFLY explain your answer. (Your answer needs to be based on MC and being able to sell each unit for $21.) AC ($/unit)
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