Assignment 2 2. What is the lowest price you would be willing to START producing this new product if you were not already in this business? Be precise. Don't round up to the nearest dollar. (1 mark) 3. If you were already committed to the fixed costs, how low could the price per picture frame fall before you would consider shutting down production? Remember, in the SHORT RUN, you have to keep paying your fixed costs whether you produce any picture frames or not. If you can cover your variable costs, then anything over that will reduce your fixed costs. You may be losing money in the short run but you are losing less money. (1 mark) For Questions 4 to 7, you need to fill in the table for each question. You need to STATE how many workers, the level of production and the profit you will make Your costs, quantities and # of workers will be the same as you calculated in Question 1. 4. If the price per picture frame was fixed at $25, what would you do? Remember, in the short run you can't alter fixed costs, you can just decide where to set the level of production. You need to calculate total revenue and profit or loss for each level as you are given the average revenue. Remember to state both what level of production you would choose and what dollar profit you would make. (1 mark) # of PxQ price FC + VC Profit or Loss Workers TR AR TC TP O W