Do not understand abe solurce samsclub.com/om3. Following the question above, after studies to your cost and budget, you now need to considermarket structure of tacos catering in the city you operate your business. Use the cost informationobtained from the previous question, to finish the questions here.2. You are thinking to start your food catering business by making rolled tacos, which are oftencalled taquitos (corn tortillas) and flautas (flour tortillas). As suggested, one important step is toestimate startup costs and prepare the budget. Your estimate shows, on a daily basis, your fixedcost (FC), including rent, utility, fees and tax, is about $300 per day. Your variable cost (VC) islargely depending on the units of labor (variable input) you are going to use. Hiring one laborwill cost you $120 per day. Use the information given, to finish the questions below.(1) The table below presents the cost structure of your taco business. The first two columns giveyou the number of your output or tacos (Y) and the units of labor inputs. To finish this table, youneed to calculate variable cost (VC), total cost (TC), marginal cost (MC), average variable cost(1) Suppose you are now operating your business in a town which has a very competitive tacocatering market. There are many restaurants and food caterers providing rolled tacos (flautas andtaquitos). Your business is just one of many of them. If the market price (P) is $4.00 per rolledtaco, to maximize your profit, how many tacos you should make per day? At this output level,what are the values of your marginal cost (MC), marginal revenue (MR), average revenue (AR),total revenue (TR) and total profit? Note: Total profit = Total revenue - Total cost. Your resultsare estimated as values per day.(AVC) and average total cost (ATC). Note: MC = ATC/AY.Fixed Cast 130dya nable cos t920perdayfo rone labarVC= |20 x laborunitsTCp=VEn+fixedrostATOutput, Variable input and Costs (per day MC- Tn - T-1AVC-TVCTacosLaborTCMCAVCATC50ATC-TC1204208.40.002.4(2.2854 sil428571052405401201653360480600그20840960|202.18/1818120.086167 3.391304660780900020l14012601380150023042882.083833 32s117647(20 181818 2.961039(20340120(2) Due to several factors, the tacos market has dramatically changed in this town. Now you arethe only rolled tacos maker. You have a demand curve for your taco as Q = 305 - 20 * P, whereQ is the quantity demanded for your tacos per day and P is the market price ($) of each your taco.Themarket price of each rolled taco? What is the relationship between, MC, MR, P and AR? Andhow much is your total profit at this level of output?w/385420(20285714450decision maximizing your profit is now to make 165 tacos per day. Then, what is the080|2001203.06667 3.074601202.608696 32b087 3.26)10(2) What is the shape of the daily marginal cost (MC) curve, the average variable cust (AVC)curve and the average total cost (ATC) curve? And why they look like that shape? After somestudy to your long-run average total cost, you find it has a similar shape es the seart-ran (daiiy)ATC curve. Why the long-run ATC curve has such a shape?MCAVC and ATC are usually U shaped. ATC falls inthe beginning andin the long run Stabilizcs and rises a little12010| 00808.6040ATC20AVC200 300 L4 oo00200 300 400 500 6must consTar.

Cost is the monetary value incurred to produce one goods which include variable and fixed cost . TC…

2. You are thinking to start your food catering business by making rolled tacos, which are often called taquitos (con tortillas) and flautas (flour tortillas). AS suggested, one important step is to estimate startup costs and prepare the budget. Your estimate shows, on a daily basis, your fixed cost (FC), including rent, utility, fees and tax, is about $300 per day. Your variable cost (VC) is largely depending on the units of labor (variable input) you are going to use. Hiring one labor will cost you S120 per day. Use the information given, to finish the questions below. (1) The table below presents the cost structure of your taco business. The first two columns give you the number of your output or tacos ((Y) and the units of labor inputs. To finish this table, you need to calculate variable cost (VC), total cost (TC), marginal cost (MC), average variable cost (AVC) and average total cost (ATC). Note: MC = ATC/ AY Fixed cast 4300 vanable cost z0perday forone labar VC= |20 x laborun its TC=VEn+firedrostAte AVC=TVC Output, Variable input and Costs (per dayMC Tep- TG-1 AY Tacos Labor VC TC MC AVC АТС Q 120 ATC-TC 50 420 0.00 2.4 240 360 480 600 105 540 (2.28314 Sil42857 |20 120 120 124117647 (20 18818 2.961039 120 120 8.4 165 3 660 780 900 (020 l140 1260 1380 1500 230 4 2.08657 3.391304 3 25 288 340 6. 120 720 840 960 1080 1200 385 7. 2485714 120 420 8. 9. 3.066667 3.07 450 460 (20 2.b0696 32 bo81 3.26 10 (2) What is the shape of the daily marginal cost (MC) curve, the average variable cst (AVC) curve and the average total cost (ATC) curve? And why they look like that shape? After some study to your long-run average total cost, you find it has a similar shape es the set-ran (deiiy) ATC curve. Why the long-run ATC curve has such a shape? Il cloaord: ATc falls inthe beginning and

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 4PA