1) Consider the long-run productior of shirts. The cost of the indivisible inpu 3 used in the production of shirts is $400 per u.-.,. 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.

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1) Consider the long-run productior of
shirts. The cost of the indivisible inpu s used
in the production of shirts is $400 per u.-,. 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.
Transcribed Image Text:1) Consider the long-run productior of shirts. The cost of the indivisible inpu s used in the production of shirts is $400 per u.-,. 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.
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