Economic Homework about profit maximization in perfect competition?

So here is the problem and I would like to know if my answers are correct.

ABC Corp has an agricultural company involved in rice production. The following information relates to its financial performance in 2016:

Total revenue (35000 kilos) $1200000

Total variable cost 400,000

total fixed cost 300,000

a. What would be the breakeven price? (my answer is $20)

b. What would be the shutdown point (in price)? (my answer is $11.43)

c. What price would it maximize its profit assuming a perfect competition rice industry?

thank you!

1 Answer

Relevance
  • Oiy
    Lv 4
    1 month ago

    Average total cost= break-even point =700000/35000= $20

    The shut down point=400000/35000=$11.43

    The price is $34.29

Still have questions? Get your answers by asking now.