Question 17 If you know that the ATC for a product = AED 20 and the Total fixed cost = AED 2000 Total variable cost = AE

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Question 17 If you know that the ATC for a product = AED 20 and the Total fixed cost = AED 2000 Total variable cost = AE

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Question 17
If you know that the ATC for a product = AED 20
and the Total fixed cost = AED 2000
Total variable cost = AED 400
Quantity produced = 120 units
What changes can this company do to decrease its ATC? (3x2=6 marks)
1- show the change in the TFC (increase or decrease)? (2 marks)
2- show the change in the TVC (increase or decrease)? (2 marks)
3- show the change in the Quantity (increase or decrease)? (2 marks)
Total = 6 marks
What are possible three market conditions in which the invisible hand is not working and there is a dead weight loss (lost economic surplus) in the market? (3x2 = 6 marks)
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