Karen runs a print shop that makes posters for large compani

Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1.00 per poster. She has fixed costs of $250.00. Her variable costs are $1,800 for the first thousand posters, $1,500 for the second thousand, and then $900 for each additional thousand posters.

What is her AFC per poster if she prints 1,000 posters?

Instructions: Round your answer to two decimal places.

$

What is her AFC per poster if she prints 2,000 posters?

Instructions: Round your answer to three decimal places.

$

What is her AFC per poster if she prints 10,000 posters?

Instructions: Round your answer to three decimal places.

$

What is her ATC per poster if she prints 1,000?

Instructions: Round your answer to two decimal places.

$

What is her ATC per poster if she prints 2,000?

Instructions: Round your answer to three decimal places.

$

What is her ATC per poster if she prints 10,000?

Instructions: Round your answer to three decimal places.

$

If the market price fell to 85 cents per poster, would there be any output level at which Karen would not shut down production immediately?   (Click to select)YesNo

Solution

Anss: As per give data

market price = $1.00 per poster

fixed costs = $250.00

variable costs = $1,800 ( for first 1000 posters ) , = $1,500 for the second thousand , $900 for each additional thousand posters

1): What is her AFC per poster if she prints 1,000 posters

as we know AFC = FC/ Q = 250 / 1000 = 0.25

AFC= 0.25

2):What is her AFC per poster if she prints 2,000 posters?

   AFC = FC / Q = 250 / 2000 = 0.125

AFC = 0.125

3): What is her AFC per poster if she prints 10,000 posters?

AFC = FC/ Q = 250 / 10000 = 0.025

AFC = 0.025 $

4): What is her ATC per poster if she prints 1,000?

TC / Q = ATC

So TC = fixed cost + variable cost (quanity)

TC = 250 + 1800 (1000) = 1800250

ATC = TC / Q = 1800250 / 1000    so ATC= 1800.25 $

5): What is her ATC per poster if she prints 2,000?

TC / Q = ATC

So TC = fixed cost + variable cost (quanity)

TC = 250 + 1500 (2000) = 300250

ATC = TC / Q = 3000250 / 2000    so ATC= 1500.125 $

6): What is her ATC per poster if she prints 10,000?

TC / Q = ATC

So TC = fixed cost + variable cost (quanity)

TC = 250 + 900 (10 000) = 9000250

ATC = TC / Q = 9000250 / 10000    so ATC= 900.025 $