John Keeps Beehives and Sells 100 Quarts of Honey Per

question 112

Essay

John keeps beehives and sells 100 quarts of honey per month. The honey market is perfectly competitive, and the price of a quart of honey is $10. John has an average variable cost of $5 and an average fixed cost of $3. At 100 quarts per month, John's marginal cost is $10.
a) Is John maximizing his profit? If not, what should John do?
b) Calculate John's total revenue, total cost, and total economic profit or economic loss when he produces 100 quarts of honey.

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Definitions:

Debt Guarantee

An arrangement where a third party promises to assume the debt obligation of a borrower if that borrower defaults.

Investment Account

An account held by an individual or entity with a financial institution for the purpose of trading or holding investments.

Stock Issuance

The process by which a company distributes its shares to investors, thereby raising capital.

Investment Account

An account held at a financial institution or brokerage that is used by investors to hold and manage securities, such as stocks, bonds, mutual funds, and other investment products.