Answer to Question #18827 in Microeconomics for Shkelqim
Doggy Treats is selling dog terats in a purely competitive market. Its output is 800 treats, which it sells for $10 a treat. At the 800-treat leel of output, the marginal cost is $11, the average variable cost is $9.00, and the average variable is $8.00. Should the firm increase output, decrease output, or not produce? Why? How should the firm determine that optimal level of output.
TP = (P - ATC)*Q = (P - AVC - AFC)*Q = (10 - 9 -8)*800 = -$5600 The firm faces losses, but its ATC<P<AVC, so it should work. It should decrease its production as P = MR < MC
If you’re a student who is stuck on an assignment or project and you literally have no one to turn to, AssignmentExpert can help you. They managed to get me through my summer semester and for that I am very grateful! 100/100 on my final project! If you think this is a scam, IT IS NOT. Everything is so easy and AssignmentExpert is so helpful! And not to mention they do original work every time! For my final project I got a 10% similarity on TurnItIn!