The market price for wallets is 20 . Your technology is such that ...

[PhilipSeeMore]

The market price for wallets is 20 . Your technology is such that at your most efficient production point, the average total cost of producing a wallet is 2.50 . Your manager runs into your office and shouts, Boss Average costs are rising Average costs are rising To make a profit-maximizing decision, you should:
 a. d or e.
  b. immediately stop production.
  c. completely ignore your manager.
  d. ask the manager about the marginal cost.
  e. ask the manager about the average total cost.

Question 2

Suppose that when price is 10, quantity supplied is 20 . When price is 6, quantity supplied is 12 units. The price elasticity of supply is:
 a. 0.5.
  b. 0.8.
  c. 1.0.
  d. 1.5.
  e. 2.0.

[coreycathey]

Answer to Question 1

d

Answer to Question 2

c

[PhilipSeeMore]

Gracias!

[isabelt_18]

Excellent