c.The table shows the average total cost. Graph omitted. Average total cost is U-shaped. When quantity is low, average total cost declines as quantity rises; when quantity is high, average total cost rises as quantity rises. d.If we assume your opportunity cost of time is evenly divided within the hour from the second to the third hour, then the marginal cost of the 20thfish is 1 (bait) + 10/6 (since you catch 6 fish between the 2ndand the 3rdhour) = 2.67. Similarly the marginal cost of the 29thfish is 1 + 10/2 = 6. Marginal cost rises with the quantity of output produced, reflecting the property of diminishing marginal product. e.To maximise profit you will catch 28 fish. This will give profits of $57. See the table. f.If you continue to fish then to maximise your profits you would catch 10 fish. You would make a loss of $14. g.You would stop fishing if price is less than average variable cost, which is the case for the second hour. However, if you caught 10 fish you would get revenue of $21, with variable cost of $20. The price of $2.10 is greater than the average variable cost of $2 so you would
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