Amponsah Fashions Ltd (AF) is a firm in the perfectly competitive fashion dresses industry. Table 1...

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Amponsah Fashions Ltd (AF) is a firm in the perfectly competitive fashion dresses industry. Table 1 shows AF's cost schedule. a. Fill the table and graph the results [10 marks] b. According to the cost curves, describe and explain where diminishing returns sets in. [5 marks]. C. What is the relationship between ATC and MC, AVC and MC? Explain. [5 marks] Describe AF's minimum efficient scale (MES). [5 marks] d. e. f. AF is selling in a perfectly competitive market at price of $40 per unit. What is the profit maximising output for AF? Explain. What is the profit or loss for AF? Should AF continue to produce in the long run? [10 marks] If the market price falls to $20, what is AF's profit-maximising output in the short run? Determine AF's profit or loss? What should AF do in the long run? Explain. [5 marks] QUESTION 1: 40 marks; Word Limit: Concise Table 1: Cost Schedule Quantity Fixed Variable Total Marginal Average Average Average Cost Cost Cost Cost (MC) Variable Fixed Total Cost Cost Cost (FC) (VC) (TC) $ (AVC) (AFC) (ATC) $ $ $ $ $ $ 0 0 46 1 2 76 96 3 104 4 110 5 116 6 126 7 140 8 164 9 198 Amponsah Fashions Ltd (AF) is a firm in the perfectly competitive fashion dresses industry. Table 1 shows AF's cost schedule. a. Fill the table and graph the results [10 marks] b. According to the cost curves, describe and explain where diminishing returns sets in. [5 marks]. C. What is the relationship between ATC and MC, AVC and MC? Explain. [5 marks] Describe AF's minimum efficient scale (MES). [5 marks] d. e. f. AF is selling in a perfectly competitive market at price of $40 per unit. What is the profit maximising output for AF? Explain. What is the profit or loss for AF? Should AF continue to produce in the long run? [10 marks] If the market price falls to $20, what is AF's profit-maximising output in the short run? Determine AF's profit or loss? What should AF do in the long run? Explain. [5 marks] QUESTION 1: 40 marks; Word Limit: Concise Table 1: Cost Schedule Quantity Fixed Variable Total Marginal Average Average Average Cost Cost Cost Cost (MC) Variable Fixed Total Cost Cost Cost (FC) (VC) (TC) $ (AVC) (AFC) (ATC) $ $ $ $ $ $ 0 0 46 1 2 76 96 3 104 4 110 5 116 6 126 7 140 8 164 9 198