Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $100. Her variable costs are $1,000 for the first thousand posters, $800 for the second thousand, and then $750 for each additional thousand posters. Instructions: Enter your answers rounded to two decimal places. a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? 2$ What if she prints 2,000 posters? What if she prints 10,000 posters? 2$ b. What is her ATC per poster if she prints 1,000? 2$ What if she prints 2,000? $4 What if she prints 10,000? 2$ c. If the market price fell to 70 cents per poster, would there be any output level at which Karen would not shut down production immediately? (Click to select) ♥
Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $100. Her variable costs are $1,000 for the first thousand posters, $800 for the second thousand, and then $750 for each additional thousand posters. Instructions: Enter your answers rounded to two decimal places. a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? 2$ What if she prints 2,000 posters? What if she prints 10,000 posters? 2$ b. What is her ATC per poster if she prints 1,000? 2$ What if she prints 2,000? $4 What if she prints 10,000? 2$ c. If the market price fell to 70 cents per poster, would there be any output level at which Karen would not shut down production immediately? (Click to select) ♥
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.6IP
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