The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $48,000 Annual lease on building = $20,000 Annual revenue from operations = $280,000 Payments to workers = $118,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 %3D %3! Creamy Crisp's implicit costs, including a normal profit, are

Consider a small dental practice. Which of the following is NOT an example of a fixed cost? Rent on the office space O The receptionist's salary O Fees to renew the dentist's license each year O X-ray film

3. XYZ corporation produces widgets. Its short-run marginal cost curve is given by MC (q) = 10 – 5q + q² (this is a parabola whose minimum occurs at q = 2.5). XYZ's fixed costs are 10. In a two panel diagrams, graph the following cost curves: (a) total cost, (b) total variable cost, (c) total fixed cost, (d) marginal cost, (e) average variable cost, and (f) average total cost. Your diagrams do not need to be scale, but must be internally consistent (i.e. the relationships between different curves must be correct). You do not need to find mathematical expressions for the other cost curves – you only need to sketch lines that are consistent with the shape of the marginal cost curve.

Determine a firm’s profit-maximizing decision in the short run.