Answered: Last year aria left her job earning…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Last year aria left her job earning $82,000 per year in order to start her own cupcake business

Her expenses included rent of $1,500 per month, as well as $500 per month in supplies and utilities. She hired two workers at $1000 per month for each. She didn't want to rent a professional oven so she purchased one for $6500, She expects it to depreciate at the rate of $900 per year .

Over the course of the year, Aria sold 125,000 cupcakes with a revenue of $125,000

Aria is business savvy and knows she must control her costs in this market with so many firms, easy entry and identical products. Therefore she will only operate at her profit-maximizing or loss-minimizing level of output

Total explicit costs for the year are

Total implicit costs for the year are

Total fixed costs for the year are

Total variable costs for the year are

Average total costs for the year are

Total accounting costs for the year are

Total economic costs for the year are

Since you can't draw it, briefly describe how her demand curve looks.

Since you can't draw it, briefly describe how her mr curve looks and where you would draw it

What price will she charge

Is she earning profit? If so, how much? If not, should she shut down? Why or why not?

Please answer the underlined questions, Thank you!

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