4. (a) A micro-entrepreneur produces caps and hats for women. The output-cost data of the business is reproduced below: Output Total Cost 50 890 | 100 920 150 1000 | 200 1260 250 1470 | 300 1850 350 2410 Using the above data estimate total cost equation and determine the average and marginal cost functions. Determine the output rate that will minimize average cost and the per-unit
4. (a) A micro-entrepreneur produces caps and hats for women. The output-cost data of the business is reproduced below: Output Total Cost 50 890 | 100 920 150 1000 | 200 1260 250 1470 | 300 1850 350 2410 Using the above data estimate total cost equation and determine the average and marginal cost functions. Determine the output rate that will minimize average cost and the per-unit
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![4. (a) A micro-entrepreneur produces caps and hats for women. The output-cost data of the
business is reproduced below:
Output
Total Cost
50
890
| 100
920
150
1000
| 200
1260
250
1470
|300
1850
350
2410
Using the above data estimate total cost equation and determine the average and marginal
cost functions. Determine the output rate that will minimize average cost and the per-unit
cost at that rate of output. Based on your findings at what price the firm would make
positive economic profit and what price it would earn negative economic profit.
(b) Complete the following table. Using the following cost data how would you estimate
the short run supply curve. If there are 20 firms in the industry, what would be the industry
supply?
VC
TC
AFC
AVC
ATC
MC
OUTPUT
FC
50
10
10
25
70
45
0.67
70
0.4
105
50
135
110
0.45
155
170
0.67
180
140
180
150
0.56](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0cde22ad-aef6-4356-a0f1-7753790b755f%2F1f9cbe62-a657-42f7-a742-571311615350%2Fn2cf9t_processed.png&w=3840&q=75)
Transcribed Image Text:4. (a) A micro-entrepreneur produces caps and hats for women. The output-cost data of the
business is reproduced below:
Output
Total Cost
50
890
| 100
920
150
1000
| 200
1260
250
1470
|300
1850
350
2410
Using the above data estimate total cost equation and determine the average and marginal
cost functions. Determine the output rate that will minimize average cost and the per-unit
cost at that rate of output. Based on your findings at what price the firm would make
positive economic profit and what price it would earn negative economic profit.
(b) Complete the following table. Using the following cost data how would you estimate
the short run supply curve. If there are 20 firms in the industry, what would be the industry
supply?
VC
TC
AFC
AVC
ATC
MC
OUTPUT
FC
50
10
10
25
70
45
0.67
70
0.4
105
50
135
110
0.45
155
170
0.67
180
140
180
150
0.56
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