MICROECONOMICS
MICROECONOMICS
null Edition
ISBN: 9780134519494
Author: Acemoglu
Publisher: PEARSON
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Chapter 6, Problem 10P

(a)

To determine

The flaw in the reasoning provided by Senator.

(b)

To determine

Change in the decision of building a new apartment due to a change in the expected revenue.

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Ball Bearings, Inc., faces costs of production as follows:a. Calculate the company’s average fixed cost, average variable cost, average total cost,and marginal cost at each level of production.b. The price of a case of ball bearings is $50. Seeing that he can’t make a profit, thechief executive officer (CEO) decides to shut down operations. What is the firm’sprofit/loss? Was this a wise decision? Explain.c. Vaguely remembering his introductory economics course, the chief financial officertells the CEO it is better to produce 1 case of ball bearings, because marginal revenueequals marginal cost at that quantity. What is the firm’s profit/loss at that level ofproduction? Was this the best decision? Explain
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