ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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(15) What is the minimum price needed by the firm to break even (i.e., earn zero economic
profits)? Explain.
(16) What is the shutdown price? Explain.
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Transcribed Image Text:(15) What is the minimum price needed by the firm to break even (i.e., earn zero economic profits)? Explain. (16) What is the shutdown price? Explain.
Consider the following daily product and cost schedule for a profit maximizing firm operating in a
perfectly competitive market.
Output
Labor Output
0
0
1
10
2
25
45
3
4
5
6
7
607075
75
FC
200
VC
0
Cost Functions
TC
MC
8
70
Assume the only variable cost is labor which is paid a rate of $100 per day.
AVC
ATC
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Transcribed Image Text:Consider the following daily product and cost schedule for a profit maximizing firm operating in a perfectly competitive market. Output Labor Output 0 0 1 10 2 25 45 3 4 5 6 7 607075 75 FC 200 VC 0 Cost Functions TC MC 8 70 Assume the only variable cost is labor which is paid a rate of $100 per day. AVC ATC
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