3. (40 points) Germaine purchases X=seeds (lbs) and plants them to produce flowers. The price of the input, seeds, is Px = $30/lb. The price of the output, flower, is Py = $4/flower. a. Germaine's fixed costs are as follows: Total Fixed Costs (TFC) = $10 Complete the cost chart below for Germaine's Cut-Flower Business. Round the answers to the hundredths place. Y=TPP (_) TVC (_) TC (_) AVC (_) ATC (_) MC (_) 0 0 5 30 40 15 60 35 90 45 120 50 52 150 182 b. Plot the Marginal Cost (MC), Marginal Revenue (MR), and Average Variable Cost (AVC) curves on the same graph. 16 MC ( ), MR( ) 14 12 10 80 9 4 2 0 0 10 20 30 40 40 50 60 Y=TPP (# of flowers) c. What is Germaine's profit maximizing level of output? Briefly, explain why. d. Suppose the price of Germaine's output increases to $10/flower. What will the profit maximizing level of output be? e. Suppose the price of Germaine's output decreases to $1.50 per flower. What will the profit maximizing level of output be? Briefly, explain why.

Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?

How do we calculate each of the following: marginal cost, average total cost, and average variable cost?

Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.