9. Your business turns old wooden pallets into old-fashioned toys. Specifically, wooden building blocks or toy houses. If you make building blocks you expect to ean yearly revenue of $25,000. The production costs for making the building blocks will be $8000. If you make toy houses you anticipate selling 2000 houses for $10 apiece. The ATC for each house is $2. Your accounting profit from making wooden building blocks is toy houses is and your economic profit from making A. $16,000; $17,000 B. $16,000; -$1000 C. $17,000; $16,000 D. $17,000; -$1,000

9. Your business turns old wooden pallets into old-fashioned toys. Specifically, wooden building blocks or toy houses. If you make building blocks you expect to ean yearly revenue of $25,000. The production costs for making the building blocks will be $8000. If you make toy houses you anticipate selling 2000 houses for $10 apiece. The ATC for each house is $2. Your accounting profit from making wooden building blocks is toy houses is and your economic profit from making A. $16,000; $17,000 B. $16,000; -$1000 C. $17,000; $16,000 D. $17,000; -$1,000

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 1.3P

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9 The average cost of producing 10 units is Rs 30, while the average cost of producing 20 units is Rs 20. Find the average cost of producing 30 units. {Hint : Find Fixed cost. TC of 10 units = Rs 300, TC of 20 units = Rs 400, VC = Rs 10/ unit Fixed cost = TC = FC + VC (10* 10) = 300 = FC + 100 = FC = 200. Thus, AC of producing 30 units will be Rs 16.67}
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