1) Consider the long-run production of shirts. The cost of the indivisible inputs used in the production of shirts is $400 per day. To produce one shirt per day, the firm must also spend a total of $55 on other inputs-labour, materials, and other capital. For each additional shirts, the firm incurs the same additional cost of $55. a) Compute the average cost for 50 shirts, 100 shirts, 130 shirts, and 200 shirts. b) Draw the long-run average cost curve for 50,100,130 and 200 shirts per day.

1) Consider the long-run production of shirts. The cost of the indivisible inputs used in the production of shirts is $400 per day. To produce one shirt per day, the firm must also spend a total of $55 on other inputs-labour, materials, and other capital. For each additional shirts, the firm incurs the same additional cost of $55. a) Compute the average cost for 50 shirts, 100 shirts, 130 shirts, and 200 shirts. b) Draw the long-run average cost curve for 50,100,130 and 200 shirts per day.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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