ECON 100 Take Home Assignment No. 2

St. Charles Community College
ECON 100   Survey Economics
Take Home Assignment No. 2 


Pete and Patty operate a commercial kennel named The Puppy Pharm in their back yard.  This small business operatesin the perfect competition model.   The monthly costs and sales are shown below, and they sell their puppies for $200.00 each.

 

Number of Puppies Sold Per Month
Monthly Fixed Costs, $  
      Monthly Variable Costs, $
Total Monthly Costs, $ 
       Marginal Costs, $  
  Average Total Cost, $
0  
600
0  




600 
125



2  
600
200




600
310




600
460




600
660




600
960



7  
600
1,360





Questions:

a.    Complete the chart above by calculating the Total Monthly Costs, the Marginal Costs, and the Average Total Cost.

b.    Graph the values shown in the completed chart above.

c.    What is the profit maximizing level of operation for The Puppy Pharm?.

d.    Is this enterprise profitable at the profit maximizing level of operation?  Explain your answer.