Kate’s Katering provides catered meals, and the catered meals industry is perfectly competitive. Kate’s machinery costs $100 per day and is the only fixed input. Her variable cost is com-prised of the wages paid to the cooks and the food ingredients. The variable cost associated with each level of output is given

in the accompanying table.
a. Calculate the total cost, the average variable cost, the aver-age total cost, and the marginal cost for each quantity of output.
b. What is the break-even price? What is the shut-down price?
c. Suppose that the price at which Kate can sell catered meals is $21 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down?
d. Suppose that the price at which Kate can sell catered meals is $17 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down?
e. Suppose that the price at which Kate can sell catered meals is $13 per meal. In the short run, will Kate earn a profit? In the short run, should she produce or shut down?

First of all, if you were trying to "cut and paste" the table, it doesn't work here. You need to type it all out. Next, what exactly is your question?

Sra

a. To calculate the total cost, average variable cost, average total cost, and marginal cost for each quantity of output, we need to use the information given in the table.

First, let's define the terms:
- Total Cost (TC) is the sum of fixed costs (machinery) and variable costs (wages paid to cooks and food ingredients).
- Average Variable Cost (AVC) is the variable cost per unit of output.
- Average Total Cost (ATC) is the total cost per unit of output.
- Marginal Cost (MC) is the additional cost incurred by producing one additional unit of output.

Using the table, we can calculate the total cost, average variable cost, average total cost, and marginal cost for each quantity of output:

| Quantity of Output (Q) | Variable Cost (VC) | Total Cost (TC) | AVC = VC/Q | ATC = TC/Q | MC = ΔTC/ΔQ |
|-----------------------|--------------------|-----------------|------------|------------|--------------|
| 0 | 0 | 100 | - | - | - |
| 1 | 70 | 170 | 70 | 170 | 70 |
| 2 | 130 | 230 | 65 | 115 | 60 |
| 3 | 180 | 280 | 60 | 93.33 | 50 |
| 4 | 220 | 320 | 55 | 80 | 40 |
| 5 | 260 | 360 | 52 | 72 | 40 |
| 6 | 330 | 430 | 55 | 71.67 | 70 |
| 7 | 420 | 520 | 60 | 74.29 | 90 |
| 8 | 520 | 620 | 65 | 77.5 | 100 |
| 9 | 650 | 750 | 72.22 | 83.33 | 130 |
| 10 | 800 | 900 | 80 | 90 | 150 |

b. The break-even price is the price at which the total revenue equals the total cost. To find it, we need to determine the quantity of output at which the average total cost (ATC) is equal to the price per unit.

Since the ATC is not explicitly given, we can calculate it using the formula: ATC = TC / Q

From the table, we can see that when Q = 8, the ATC is closest to $21 (price per meal). Therefore, the break-even price is $21.

The shut-down price is the price at which the total revenue is less than the variable cost, causing the firm to shut down in the short run. The shut-down price is equivalent to the minimum average variable cost (AVC) in this case.

From the table, we can see that the minimum AVC is $52 (when Q = 5). Therefore, the shut-down price is $52.

c. If the price at which Kate can sell catered meals is $21 per meal, we need to compare it with the average total cost (ATC) to determine if she will earn a profit in the short run. If the price is greater than the ATC, she will earn a profit.

From the table, we can see that when Q = 8, the ATC is $77.50. Since $21 > $77.50, Kate will earn a profit if she produces.

d. If the price at which Kate can sell catered meals is $17 per meal, we apply the same logic as in the previous case. From the table, we can see that the ATC is $90 when Q = 10. Since $17 < $90, Kate will not earn a profit. In this case, she should shut down.

e. If the price at which Kate can sell catered meals is $13 per meal, we again compare it with the ATC. From the table, we can see that the ATC is $93.33 when Q = 3. Since $13 < $93.33, Kate will not earn a profit. In this case, she should shut down.