The market price of milk is $2.50 per gallon. The relationship between the farm's output and total costs is shown in the table below. Quantity (gallons per day dollars per day) 0 100 200 300 400 500 600
Total cost (dollars per day) 400 703 880 1,008 1,16 1,410 1,840
Total Variable (costs)
Average Variable (costs)
Average Total (costs)
Marginal (Costs)
A. Draw Petunia's average variable, average total, and marginal cost curves. (Hint: You need to calculate these first)
B. Use your graphs to find Petunia's profit-maximizing output.
C. If Petunia maximizes her profit, how much profit does she make?
D. What is Petunia's shutdown point? What is her economic profit at the shut-down point?