Ball Bearings inc . faces costs of production asfollows:
Quantiy total fixedcosts total variable costs
0 $100 $ 0
1 100 50
2 100 70
3 100 90
4 100 140
5 100 200
6 100 360
A) calculate the company's average fixed costs, a veragevariable costs , average total costs and marginal costs.
b) the price of a case of ball bearings is $50. seeing thatshe can't make a profit , the chief exective officer (CEO)decides to shut down operations. what are the firm's profits/losses? was this a wise decision ? Explian .
C) Vaguely remembering his intoductory economics course, thechief Financial officer tells the CEO it is better to produce 1case of ball bearings , because marginal revenue equals marginalcost at the quantity . what are the firms's profit /losses at thelevel of production ? was this the best decision ? Expalin