a. Compute the average cost and marginal cost. Units of output Total Cost Average Cost Marginal Cost 30 40 55 4 75 100 130 165 b. Plot in a graph the average cost and the marginal cost. c. What is the efficient production of the firm? Explain its implication if the firm produce more than its efficient output.

a. Compute the average cost and marginal cost. Units of output Total Cost Average Cost Marginal Cost 30 40 55 4 75 100 130 165 b. Plot in a graph the average cost and the marginal cost. c. What is the efficient production of the firm? Explain its implication if the firm produce more than its efficient output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Use the information in the following graph to find the values for the following at an output level of 1000: Cost (per unit) $30 20 15 3. b. C. d. Marginal cost Total cost 1000 Variable cost Fixed cost MC ATC AVC Quantity of output
What are diseconomies of scale? Diseconomies of scale is A. when the marginal product of labor is decreasing with output. B. when the marginal cost of production is increasingwith output. C. when a firm's long-run average costs decrease with output. D. when a firm's long-run average costs increase with output.
If the marginal cost of production is greater than the average cost, in what direction must the average cost be changing if any? A. The average cost must be rising. B. The average cost would equal 0. C. The average cost must be falling. D. The average cost is unaffected. E. The average cost would become non-existent.
Graph the curves for total cost, ATC, AVC, AFC, MC. Explain shape of these curves and the relationship between ATC and MC.
1. Visualizing average costs and marginal costs as a slope? Take an example 2. Long run average total cost curve? Take an example 3. Minimium efficient scale and market concentration? Take an example
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2. The following table depicted a computer manufacturer's total cost of producing computer: Quantity Price 500,000 1 540,000 2 560,000 3 570,000 590,000 620,000 6 660,000 7 720,000 8 800,000 920,000 10 1,100,000 d)On one diagram, draw the manufacturer's AVC, ATC, and MC curves.
Whereat for the firm operating at it efficient scale, a. the marginal cost curve intersects at the minimum point of AVC curve. b. the marginal cost curve intersects at the minimum point of ATC curve. c, the marginal cost curve intersects at the minimum point of AFC curve. d. the slope of total cost is the smallest.
4.The Marginal Cost Curve is shaped like a Nike swoosh. graph. 5.The Marginal Cost Curve crosses the Average Total Cost curve and Average Variable Cost curves at the lowest point. graph.
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When the marginal cost is lesser than the average cost the firm is producing in which Answers: A. The average cost is decreasing. B. The total cost is decreasing. C. The average cost is increasing. D. The marginal cost is decreasing.
1. How does fixed cost affect marginal cost? Why is this relationship important? 2. Is it possible for total utility to increase while marginal utility diminishes? Explain. 3. Define economies of scale and explain why they might arise. Define disecononies of scale and explain why they might arise.