Anie sells basketballs in a perfectly competitive market. This table summarizes
ID: 1126448 • Letter: A
Question
Anie sells basketballs in a perfectly competitive market. This table summarizes Arnie's short-ru cost structure: output per day (), total cost (TC), average total cost (ATC) and marginal cost (MC) Quantity Total Cost Average Total Cost Marginal Cost $10.00 15.00 $15.00 17.50 22.50 30.00 40.00 52.50 67,50 8.75 7.50 7.50 8.00 8.75 9.64 10.63 11.67 2.50 5.00 7.50 10.00 12.50 15.00 17.50 20.00 85.00 105.00 Suppose the current market price of basketballs is $15.00. When Armnie maximizes profits: A. He will produce basketballs per day, B. His Total Revenue will be C. His Total Costs will be D. He will earn a Total Profit of E His Fixed Costs will be equal to F. His Variable Costs will be equal to If the market price of basketballs falls to $2.50, and Arnie continues to maximize profits: G. His Total Revenue will be H. His Total Costs will be In this situation, Arnie should (circle one) Short Run & Exit the industry in the Long Run B. Continue producing in the Short Run & Exit the industry in the Long RunExplanation / Answer
a) He will produce 7 basketball per day. -- ( becasue at this output MR=MC)
b) His total revenue will be = 105. ( TR = 15*7 = 105)
c) Total cost is = 67.50
d) Total profit = 105 -67.50 = $37.5
e) fixed cost = 10
f) Variabel cost = 57.50
when market price is 2.50
g) total revenue = 5
h) total cost = 17.5