# A firm has fixed costs of \$60 and varlable costs as Indicated in the table below. Complete the table.Instructions: Round your answers so that you enter no more than 2 declmal places.Average FixedCostAverage TotalCostTotalTotal FixedTotal VariableAverageMarginal CostTotal CostProductCostCostVariable CostCS60145285312041501852252708325939010485

Question
184 views

Question 1 Danny “Dimes” Donahue is a neighborhood’s 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of \$1.5 each, he sells 250. At a price of \$1 each, he sells 300.

Instructions: Use the midpoint method and round your answer to 2 decimal places. Do not include a minus sign.

a. What is the elasticity of demand?

Question 2

Linda sells 100 bottles of homemade ketchup for \$10 each. The cost of the ingredients, the bottles, and the labels was \$700. In addition, it took her 20 hours to make the ketchup and to do so she took time off from a job that paid her \$20 per hour.

Linda's accounting profit is:

Linda's econmica profit is:

Question 3 Gomez runs a small pottery firm. He hires one helper at \$11,500 per year, pays annual rent of \$7,000 for his shop, and spends \$22,500 per year on materials. He has \$40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him \$6,500 per year if alternatively invested. He has been offered \$22,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth \$4,500 per year. Total annual revenue from pottery sales is \$80,000.

a. Calculate the accounting profit for Gomez’s pottery firm.

b. Now calculate Gomez's economic profit.

check_circle

Step 1

Hey, Thank you for the question. According to our policy we can only answer 1 question per session. If you need further help, post the question again.

Given P1= \$1.5, Q1 = 250 and P2= \$1, Q2=300

Step 2

The mid-point for Price el...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in