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Problem #3, questions A, B, C
,, mluitale the Pange of output levels over which the company will experience economies of scale. d. At which output level is the minimum efticient scale achieved? PROBLEM #3 A company produces a product that it sells in a perfectly reviews its product total fixed and total variable costs (TFC and TVC) in the short run. Find the total cost (TC), marginal cost (MC), and average total cost (ATC) for the company at each level of output (complete the table) e company carefully ion and cost records over the past year. The table below shows the companys competitive market. Th Quantity (q) TFC TVCTC MC ATC 80 100 170 PROBLEM #3 (CONTINUED) a. Briefly explain why the companys total cost is positive, even if the company decides not to produce any output. b. At which level of output do diminishing marginal returns set in? c. Suppose the competitive price for this product is S75. If the companys goal is to maximize profits, determine the quantity the company will produce and sell. (You may use any valid method for finding the profit-maximizing output for this company.) PROBLEM #4 The graph below represents the cost curves for an ice cream producer. Assume that thę market for
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