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?
- OiyLv 41 month ago
Average total cost= break-even point =700000/35000= $20
The shut down point=400000/35000=$11.43
The price is $34.29