Question: Quantity (gallons per day) Total cost (dollars per day) 0 400 100 703 200 880 300 1,008 400 1,160 500 1,410 600 1,840 2. Oleg

Quantity

(gallons per day)

Total cost

(dollars per day)

0

400

100

703

200

880

300

1,008

400

1,160

500

1,410

600

1,840

2. Oleg Farm produces and sells milk. The market for milk is perfectly competitive. The market price of milk is $2.50 per gallon. The relationship between the farm's output and total costs is shown in the table above.

a) Draw Oleg average variable, average total, and marginal cost curves.

b) Use your graphs to find Oleg profit-maximizing output.

c) Should Oleg shut down? Explain.

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