The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60. -Calculate the average total cost of producing 6 trumpets. Show your work. -Calculate the marginal cost of producing the 11th trumpet. -What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter23: Profit Maximization

Section: Chapter Questions

Problem 1E

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Brody's firm produces trumpets in a perfectly competitive market.

The table below shows Brody's total variable cost. He has a fixed cost of $240, and the price per trumpet is $60.

-Calculate the average total cost of producing 6 trumpets. Show your work.
-Calculate the marginal cost of producing the 11th trumpet.
-What is Brody's profit-maximizing quantity? Use marginal analysis to explain your answer.
-At the profit-maximizing quantity you determined in part (c), calculate Brody's profit or loss. Show your work.
-Brody also produces saxophones at a loss in a perfectly competitive market. Draw a correctly labeled graph for Brody's firm showing the following at a market price of $200.
-Brody's profit-maximizing quantity of saxophones
-Brody's loss, completely shaded

Quantity	Total Variable cost
6	$120
7	$145
8	$165
9	$220
10	$290
11	$390

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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