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2. Below is the long run average total cost curve for a book producer (publisher). ATC FC=$20 ATC FC=$50 100 ATC FC=$30 175 300 Long Run Average Total Cost Q a. Which levels of output are there increasing returns to scale, constant returns to scale, and decreasing returns to scale? b. What level of fixed costs should the publisher choose if they are to produce 100 books? C. What level of fixed costs, and how many books should be produced, to minimize average costs (cost per book)?

2. Below is the long run average total cost curve for a book producer (publisher). ATC FC=$20 ATC FC=$50 100 ATC FC=$30 175 300 Long Run Average Total Cost Q a. Which levels of output are there increasing returns to scale, constant returns to scale, and decreasing returns to scale? b. What level of fixed costs should the publisher choose if they are to produce 100 books? C. What level of fixed costs, and how many books should be produced, to minimize average costs (cost per book)?

Principles of Economics, 7th Edition (MindTap Course List)
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: The Cost Of Production
Section: Chapter Questions
Problem 7PA
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2. Below is the long run average total cost curve for a book producer (publisher). ATC FC=$20 ATC FC=$50 100 ATC FC=$30 175 300 Long Run Average Total Cost Q a. Which levels of output are there increasing returns to scale, constant returns to scale, and decreasing returns to scale? b. What level of fixed costs should the publisher choose if they are to produce 100 books? C. What level of fixed costs, and how many books should be produced, to minimize average costs (cost per book)?
Transcribed Image Text:2. Below is the long run average total cost curve for a book producer (publisher). ATC FC=$20 ATC FC=$50 100 ATC FC=$30 175 300 Long Run Average Total Cost Q a. Which levels of output are there increasing returns to scale, constant returns to scale, and decreasing returns to scale? b. What level of fixed costs should the publisher choose if they are to produce 100 books? C. What level of fixed costs, and how many books should be produced, to minimize average costs (cost per book)?
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