Use the Following Data for a Competitive Industry and a Price-Taking

question 43

Multiple Choice

Use the following data for a competitive industry and a price-taking firm that operates in this market.
Bartech, Inc. is a firm operating in a competitive market. The manager of Bartech forecasts product price to be $28 in 2015. Bartech's average variable cost function is estimated to be $A V C = 10 - 0.003 Q + 0.0000005 Q ^ { 2 }$ Bartech expects to face fixed costs of $12,000 in 2015
Now, suppose that the 2015 price forecast is drastically revised downward to $5.
-What is Bartech's profit-maximizing (or loss-minimizing) output for 2015?

• A) 0 units
• B) 1,000 units
• C) 2,000 units
• D) 3,000 units
• E) 4,000 units

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Definitions:

Productivity Issues

Challenges related to the efficiency and effectiveness with which resources are used to produce goods and services.

Lack-of-participation Error

A mistake in decision-making processes caused by not involving enough people or the right individuals, leading to less buy-in or missed insights.

Focusing on Symptoms

A mistake in problem-solving where attention is given to the immediate issues rather than addressing the underlying root causes.

Selective Perception

The process by which individuals perceive what they want to in media messages while ignoring opposing viewpoints.