# Based on the answers to the W

Based on the answers to the WipeOut Ski Company (See Calculating Cost Example in Lecture Notes), now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of \$25 each.

1. What will be the company’s profits or losses
2.  How can you tell at a glance whether the company is making or losing money at this price by looking at average cost?
3. At the given quantity(5 units) and price (\$25), Is the marginal unit produced adding to profits?
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