What is Brenda’s break-even price for a dozen of eggs? Explain how you found that answer. What is Brenda’s shut-down price for a dozen of eggs? Explain how you found that answer. If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, will Brenda make an economic profit? Explain how you determined your answer. Table 4.a.DozensFixedTotal CostVariableAverageVariable Costs Total Costsper dozenAverageof eggsCostCostsper dozen$3.35$3.35n/an/an/a10$3.35$10.50$7.15$0.72$1.0520$3.35$16.40$13.05$0.65$0.82Page 4 of 5Unit 8 [BU224 Assignment Template]DozensFixedTotal CostVariableAverageVariable Costs Total Costsper dozenAverageof eggsCostCostsper dozen30$3.35$23.10$19.75$0.66$0.7740$3.35$30.00$26.65$0.67$0.7550$3.35$36.50$33.15$0.66$0.7360$3.35$48.00$44.65$0.74$0.8070$3.35$64.40$61.05$0.87$0.9280$3.35$80.00$76.65$0.96$1.0090$3.35$135.00$131.65$1.46$1.50a. What is Brenda's break-even price for a dozen of eggs? Explain how you found thatanswer.b. jWhjat is Brenda's shut-down price for a dozen of eggs? Explain how you found thatjajswer.

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Chapter20: The Problem Of Adverse Selection Moral Hazard

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Question

What is Brenda’s break-even price for a dozen of eggs? Explain how you found that answer.
What is Brenda’s shut-down price for a dozen of eggs? Explain how you found that answer.
If the market price of a dozen eggs at the local farmers market is $1.45 per dozen, will Brenda make an economic profit? Explain how you determined your answer.

Table 4.a.
Dozens
Fixed
Total Cost
Variable
Average
Variable Costs Total Costs
per dozen
Average
of eggs
Cost
Costs
per dozen
$3.35
$3.35
n/a
n/a
n/a
10
$3.35
$10.50
$7.15
$0.72
$1.05
20
$3.35
$16.40
$13.05
$0.65
$0.82
Page 4 of 5
Unit 8 [BU224 Assignment Template]
Dozens
Fixed
Total Cost
Variable
Average
Variable Costs Total Costs
per dozen
Average
of eggs
Cost
Costs
per dozen
30
$3.35
$23.10
$19.75
$0.66
$0.77
40
$3.35
$30.00
$26.65
$0.67
$0.75
50
$3.35
$36.50
$33.15
$0.66
$0.73
60
$3.35
$48.00
$44.65
$0.74
$0.80
70
$3.35
$64.40
$61.05
$0.87
$0.92
80
$3.35
$80.00
$76.65
$0.96
$1.00
90
$3.35
$135.00
$131.65
$1.46
$1.50
a. What is Brenda's break-even price for a dozen of eggs? Explain how you found that
answer.
b. jWhjat is Brenda's shut-down price for a dozen of eggs? Explain how you found that
jajswer.

Expert Solution

Step 1

It is possible to make money by selling a product, but only after subtracting the expenses of the materials and labour utilised, plus any potential gains or losses from that sale. Explicit and opportunity expenses are deducted from revenues while calculating economic profit.

As an implicit cost, opportunity costs are subject to change based on various assumptions and circumstances.

IMPORTANT

There are two types of economic profit: explicit and opportunity cost.

In business, opportunity costs are the revenues that a company forgoes because of a decision to pursue one alternative over another.

It is not necessary to disclose economic profit for internal analysis.

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