Examine the graph below that presents costs for atypical olive oil producer and answer questions: a) Whatis the ATC, AVC and AFC at q = 12? (approximate toone decimal) ATC = AVC = AFC = What is TC, VC andFC at q = 12? Show your calculations. b) If the price ofolive oil is $3.50, how much oil would a price - takingfirm be willing to produce and sell? Would the firm beable to make a profit at this price? If not, would there bea loss? Calculate & indicate profit/loss box on the graphabove. c) According to the graph, what is the break-even price/cost of a pound of olive oil? d) If the olive oilprices rise to $6 per kilogram, would the firm make aprofit? How much it would be willing to sell at thisprice?ง5) Examine the graph below that presents casts for a typical olive oil producer and answer questions:a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal)ATC=AVC-What is TC, VC and FC at q-12? Show your calculations.AFC=MCATCAVEQuantity18b) If the price of olive oil is $3.50, how much oil would a price-taking firm be willing to produce and sell? Wouldthe firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss boxon the graph above.c) According to the graph, what is the break-even price/cost of a pound of olive oil?d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sellat this price?

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Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q = 12 ? (approximate to one decimal) ATC = AVC = AFC = What is TC, VC and FC at q = 12? Show your calculations. b) If the price of olive oil is $3.50, how much oil would a price - taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break - even price/cost of a pound of olive oil? d) If the olive oil prices rise to $6 per kilogram, would the firm make a profit? How much it would be willing to sell at this price? c 5) Examine the graph below that presents costs for a typical olive oil producer and answer questions: a) What is the ATC, AVC and AFC at q-12? (approximate to one decimal) ATC= AVC- What is TC, VC and FC at q-12? Show your calculations. AFC= ATC AVE quantity b) If the price of olive oil is $3.50, how much oil would a price-taking firm be willing to produce and sell? Would the firm be able to make a profit at this price? If not, would there be a loss? Calculate & indicate profit/loss box on the graph above. c) According to the graph, what is the break-even price/cost of a pound of olive oil?

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 1DQ