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Economics, Microeconomics
Year 2

Calculate total cost using Average Total Cost


I am supposed to use the following information to answer   What is the total cost of 3,000,000 pairs
I'm not sure if my answer is correct or not.
3,000,000 * $20.00 = $60,000,000
Is this correct? If not could you show your work so that I can understand how to do it?

Athletic Shoe Production

Normal Profit $6.00
Leather costs $2.00
Rubber costs  $3.50
Metal costs   $  .50
Cotton costs $3.00
Assembly  $5.00
Total:   $20.00  This is the lowest possible cost for the production of a single pair of shoes.
                        It is also the Average total cost (ATC) of the profit maximizing or loss minimizing quantity of
                        shoes:  3,000,000

Plant & Equipment  20% if total assembly cost (not ATC)
Labor   80% of total assembly cost   (not ATC)

By OTA:  Jiong Tu, PhD (IP)

OTA Rating:  4.8/5

Your Price:  $2.19  (original value ~$11.97)

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