Assignment
In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shutdown price for a hypothetical business in a perfectly competitive market, determine if that business would incur an economic profit at various market prices, and if the business should continue to produce at each of those price levels.
SAMPLE SOLUTION
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Write My Essay For MeUnit 8 Assignment: Cost Analysis and the Perfectly Competitive Market
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Questions
Table 2.a.
1. The manufacturer’s fixed cost
The fixed cost is $ 4,500 since even at zero production units, after an hour, this is the cost incurred.
2.
- Finding the variable cost
It is obtained by taking total costs less fixed cost
- Calculating average variable cost
It is obtained by dividing the number of units produced by the variable cost obtained above.
- Finding average total cost
Obtained as number of units divided by the total costs…
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