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Bob makes hand-sewn sweaters, 250 of them per year, sold for $200 each. His annual costs are: fabric for $300, thread for $50, a sewing machine that is leased annually for $40, and needles that are leased annually for $5. To operate his sweater business he gave up a job mending clothes for the local tailor, for which he earned $2000 per year. Calculate these for Bob:
(a) total revenue.
(b) total cost
(c) total economic profits
(d) average fixed cost.
(e) average total cost
(f) profit margin
(g) total accounting profits.
(You must show your calculations to get credit of your answers.)
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