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

question 30

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.
-Under the revised forecast how much profit (loss) does Bartech, Inc. expect to earn?

• A) $0
• B)-$12,000
• C) $2,500
• D) $16,000
• E) $18,000

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