Break even point microeconomics

In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shut-down price for a hypothetical business in a perfectly competitive market, and determine if that business would incur an economic profit at various market prices, and should the firm continue to produce at each of those price levels.Unit 8 BU224 | Microeconomics Unit 8 Assignment: Break–even Price and Shut– down Price Name: Course Number and Section: BU224–0X Date: General Instructions for all Assignments 1. Unless specified differently by your course instructor, save this assignment template to your computer with the following file naming format: Course number_section number_Last_First_unit number 2. At the top of the template, insert the appropriate information: Your Name, Course Number and Section, and the Date 3. Insert your answers below, or in the appropriate space provided for in the question. Your answers should follow APA format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style (double spaced, in Times New Roman, 12–point, and black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. 4. Upload the completed Assignment to the appropriate Dropbox. 5. Any questions about the Assignment, or format questions, should be directed to your course instructor. In this Assignment, you will be assessed on the following outcomes: BU224-3: Examine how changes in the cost of production affect pricing and production quantity decisions of a firm in a perfectly competitive market. GEL-8.5: Apply critical thinking to the field of study. Assignment v.6.16.17 1 of 6 Unit 8 BU224 | Microeconomics In this Assignment, you will define and calculate the remaining six major cost elements of a business, when given the Total Costs and the Quantity Produced, as well as to use the computed costs to determine a minimum cost output level for that business. In addition, you will compute both the break-even price and the shut-down price for a hypothetical business in a perfectly competitive market, and determine if that business would incur an economic profit at various market prices, and should the firm continue to produce at each of those price levels. Questions Table 2.a. shows an LED light bulb manufacturer’s total cost of producing LED light bulbs. Table 2.a. Cases of LED light bulbs produced in an hour Total Cost 0 10 20 30 40 50 60 70 80 90 $4,500 $4,900 $5,100 $5,300 $5,400 $5,700 $6,700 $7,900 $9,700 $11,800 1. What is this manufacturer’s fixed cost? Explain why. 2. Assuming that you only know the Total Costs (TC) (as is shown in the Table 2.a. above) explain how you would calculate each of the following: a. Variable Cost (VC); v.6.16.17 2 of 6 Unit 8 BU224 | Microeconomics b. Average Variable Cost (AVC); c. Average Total Cost (ATC); d. Average Fixed Cost (AFC); and, e. Marginal Costs (of a single case).