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x: Cyrus Exam Practice Solutions × nTV !.tst-ECON- /apple/Downloads/Cyrus%20Exam%20 Practice%20Solutions%20Fa0%202017%20( rs 5a. Output (kitchens cost remodelled) Variable Total cost Marginal Average Average total cost variable cost cost 8,000 30,000 22,000 12,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000 30,000 26,000 21,333 18.000 16,800 16,667 38,000 60,000 72,000 80,000 92,000 38,000 30,000 24,000 20,000 18,400 18,000 18,286 17,143 19,000 20,000 21,200 30,000 52,000 64,000 72,000 84,000 100,000 120,000 128,000 144,000 172,000 204,000 212,000 108,000 152,000 18,000 19,111 20,400 180,000 10 b. The firm will produce as long as the price exceeds marginal cost, so the firm will r kitchens. Profit-6 × $19,000-$108,000-$6,000 c. The firm will stay in business as long as the market price exceeds the minimum ave variable cost, which here is $16,667, so if the price falls below $16,667, the firm will

Explanation / Answer

As the market price is constant, the marginal revenue is $19000

So, it should to the point where marginal cost is less than 19000

So, he should produce 6 outputs

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