Expected sales next year are 40,000 units with a standard deviation of 4,000 units.
- Determine the probability that Cool-Aire will incur an operating loss.
Determine the probability that Cool-Aire will operate above its break-even point.
Assume that a firm in a perfectly competitive industry has the following total cost schedule:
a. Calculate a marginal cost and an average cost schedule for the firm.
b. If the prevailing market price is $17 per unit, how many units will be produced and sold? What are profits per unit? What are total profits?
c. Is the industry in long-run equilibrium at this price?