Calculate the profit of a firm in the short run

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Reference no: EM13825551

Problems-

1. Costs for Toy-Making Firm

Q   ATC        AVC       AFC       MC
0   -            -          -          -
8   93.75   31.25   62.50   31.25
17   58.82   29.41   29.41   27.78
27   46.30   27.78   18.52   25.00
40   37.50   25.00   12.50   19.23
54   32.41   23.15   9.26   17.86
66   30.30   22.73   7.58   20.83
76   29.61   23.03   6.58   25.00
84   29.76   23.81   5.95   31.25
91   30.22   24.73   5.49   35.71
96   31.25   26.04   5.21   50.00

(Table) If the toy-making firm in the table in the short run faces a market price of $25:

A) it will maximize its profits by producing 96 toys.

B) it will minimize its losses by shutting down.

C) it will minimize its losses by producing 27 toys.

D) it will minimize its losses by producing 76 toys.

2. When a firm experiences economies of scale:

A) its long-run average total costs remain the same as output increases.

B) it runs into bureaucratic red tape.

C) its long-run average total costs increase as output increases.

D) it can take advantage of specialization of labor and management.

Additional Information-

These multiple choice problems belong to Economics. The first problem is about calculating the profit of a firm in the short run and the second problem is about firm experiencing economies to scale.

Reference no: EM13825551

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