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? The text describes two tables related to Lin’s Fortune Cookies. The first table is a demand schedule indicating the relationship between price and quantity demanded. The second table provides cost data.**Demand Schedule for Lin’s Fortune Cookies:**- **Price (dollars per batch):** Constant at 50 for all entries.- **Quantity Demanded (batches per day):** Increases from 0 to 6 as follows: - 0 batches when the price is $50 - 1 batch - 2 batches - 3 batches - 4 batches - 5 batches - 6 batches**Cost Data for Lin’s:**- **Quantity (batches per day):** Ranges from 1 to 8.- **AFC (Average Fixed Cost) dollars per batch:** - Starts at 84 for 1 batch and declines to 10.5 by 8 batches. - **AVC (Average Variable Cost) dollars per batch:** - Starts at 51, decreases initially and then stabilizes around 36 to 39. - **ATC (Average Total Cost) dollars per batch:** - Starts at 135, decreases to a low of 52, then exhibits a slight increase to 55. - **MC (Marginal Cost) dollars per batch:** - Starts at 37, varying non-linearly, with values such as 29, 22, 32, and rising to 55 by the 8th batch.These tables help illustrate Lin's Fortune Cookies' demand behavior and cost structure in relation to production volumes.

Price (dollars per batch) Quantity demanded (batches per day) Total Revenue Marginal Revenue 50 0 0 50 1 50 50 50 2 100 50 50 3 150 50 50 4 200 50 50 5 250 50 50 6 300 50 At a market price of $35.20 Lin’s produce, 4 units, and the average total cost is 57. Profit = Quantity * [Price - Average Total Cost] Profit = 4 * [$35.20 - $57] Profit = 4 * [-21.8] Profit = -$87.2

Answered: At a market price of $35.20 a batch,…

Business

Economics

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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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