The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $10. Sales revenue is$20 per unit. Fill in the table as much as is useful. Calculate profits and answer the followingquestions 1-7TotalAverageAverageVariableFixedTotalvariabletotalmarginalQuantitycostcostcostcostcostcost0101102283454701. What is the total cost for an output of 4 units?a) 0b)14c)60d)80e) none of the above2. What is the Average variable cost for an output of 2 units?a) 0b) 14c)60d)80e) none of the above3. What is the profit for an output of 1 units?a) -10b) -5C) 0d) 5e) 104. What is WipeOut’s profit maximizing output in the short run?a) 0b) 1C) 2d) 3e) 4A new competitor entered the market using a better production method that allows them to undercutthe current market price. The price falls to $15 per unit.5. What is WipeOut’s profit maximizing output in the short run?a) 0b) 1c) 2d) 3e) 46. What is Wipe Out’s profit maximizing output in the long run?a) 0b) 1c) 2d) 3e) 47. Due to this competition, Ceteris Paribus, consumer surplusa) increases b) decreases c) stays the same d) cannot be determined e) it’s not “e”!
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