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1. Calculate TC, MC, AVC, AFC and ATC for all Qty options.
2. State what the breakeven and shut down prices are.
For problems 3-6, explain what the short term production decision would be:
3. Assume the market price was $225, would the firm produce? At what Qty level and what would be the resulting profit?
4. Assume the market price was $350, would the firm produce? At what Qty level and what would be the resulting profit?
5. Assume the market price was $175, would the firm produce? At what Qty level and what would be the resulting profit?
6. Assume the market price was $125, would the firm produce? At what Qty level and what would be the resulting profit?
7. What would happen in the long term if the short term decision was to continue producing at a loss? When specifically would this change occur?
Individual Technical Problem Below are the variable costs of a vodka supplier ASSUME Fixed Costs = $100 and the variable costs are as listed below: Qty VC 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 200 300 480 700 1,000 1,400 1,950 2,700
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