Karen runs a print shop that makes posters for large companies. It is a very competitive business.

1.

Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,800 for the first thousand posters, $1,500 for the second thousand, and then $900 for each additional thousand posters.

Instructions: Round your answers to 3 decimal places.

a. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? $.

What if she prints 2,000 posters? $.

What if she prints 10,000 posters? $.

b. What is her ATC per poster if she prints 1,000? $.

What if she prints 2,000? $.

What if she prints 10,000? $.

c. If the market price fell to 85 cents per poster, would there be any output level at which Karen would not shut down production immediately? (Click to select)NoYes.

2. value:

25.00 points

A purely competitive wheat farmer can sell any wheat he grows for $20 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on.

a. Use the table below to answer the following questions. How many bushels will each of the farmer’s five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre?

Instructions: Enter your answers as whole numbers.

b. If the marginal cost of planting and harvesting an acre is $18,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres.