Ball Bearings, Inc. faces costs of production as follows:
Quantity Total Fixed Costs Total Variable Costs
0 $100 $0
1 $100 $50
2 $100 $70
3 $100 $90
4 $100 $140
5 $100 $200
6 $100 $360

a. Calculate the company’s average fixed costs, average variable costs, average total costs, and marginal costs at each level of production.

b. The price of a case of ball bearings is $50. Seeing that he can't make a profit, the chief executive officer (CEO) decides to shut down operations. What is the firtm's profit/loss? Was this a wise decision? Explain.

c. Vaguely remembering his introductory economics course, the chief financial officer tells the CEO it is better to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity. What is the firm's profit/loss at that level of production? Was this the best decision? Explain.