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lectur24-page3 - with an increase in production and sales...

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a) E(average total cost)= $2.72/bu. b) E(total revenue)= $300,000 E(total cost)= $271,110 E(total net rev.)= $28,890 (accounting profit) Had we based our decision on the ATC we would assume, since our price ($3.00/bu.) was more than ATC ($2.71) , that we would make a greater profit
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Unformatted text preview: with an increase in production and sales. Such is not the case. WE must calculate through to the TNR and determine whether the TNR of the "possible situation" will be greater or less than the TNR of the "current operation"....
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