2. As an employee of the Rays-R-Us Corporation (a solar panel company), you have been asked to determine the nature of their long-run cost structure. Some cost data has been collected for you and appears in the table below. Quantity of Generators Labor Costs Tools Cost $2 $4 $7 $8 $15 $24 $28 $41 $65 $80 Total Cost Long Run Average Cost $10 12 14 16 20 30 42 1 4 5 8 9 10 70 100 (a) Fill in the missing values in the table. (b) Graph the firm's long-run average cost curve below. (c) Determine the range of output levels over which there exists economies and diseconomies of scale, and mark these ranges on your graph.
2. As an employee of the Rays-R-Us Corporation (a solar panel company), you have been asked to determine the nature of their long-run cost structure. Some cost data has been collected for you and appears in the table below. Quantity of Generators Labor Costs Tools Cost $2 $4 $7 $8 $15 $24 $28 $41 $65 $80 Total Cost Long Run Average Cost $10 12 14 16 20 30 42 1 4 5 8 9 10 70 100 (a) Fill in the missing values in the table. (b) Graph the firm's long-run average cost curve below. (c) Determine the range of output levels over which there exists economies and diseconomies of scale, and mark these ranges on your graph.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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Question
Transcribed Image Text:2. As an employee of the Rays-R-Us Corporation (a solar panel company), you have been asked to
determine the nature of their long-run cost structure. Some cost data has been collected for you and
appears in the table below.
Quantity of
Generators Labor Costs Tools Cost
$2
$4
$7
$8
$15
$24
$28
$41
$65
$80
Total Cost
Long Run Average Cost
$10
12
14
16
20
30
42
1
4
5
8
9
10
70
100
(a) Fill in the missing values in the table.
(b) Graph the firm's long-run average cost curve below.
(c) Determine the range of output levels over which there exists economies and diseconomies of scale, and
mark these ranges on your graph.
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