In the given diagram, BDE represents the average variable cost and BCDF represents the marginal cost curve. OA is the minimum possible average variable cost. The supply curve is represented by
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- Why does the ATC curve reach its minimum point further along the Quantity Axis than the AVC curve and a higher point along the MC curve?Each firm in a perfectly competitive industry has the following production function: q = K1/4L1/4 Each firm takes factor prices as given. Factor prices are r = 4, w = 16 Suppose firms in this industry face a recurring fixed cost FC=144, ie, firms face a fixed cost FC=144 in the long run. Rewrite long run MC(q) and AC(q) functions and then find the long run equilibrium price.The cost function of a firm is c(y) = 3y^2 + 6y + 5.1. Find the Average variable and Marginal Cost curves of the firm.2. What is the quantity level where the average variable cost is minimized?
- The curves show the marginal revenue (MR), marginal cost (MC), and average total cost (ATC) functions for a firm in a competitive market. Use the area tool to draw the area representing the maximum profit the firm could earn—that is, the profit the firm would earn if it produced the optimal quantity.The four statements below describe properties of a firm's short run cost curves. Complete the statements using words from the list given below. • The increase in total cost from producing an additional unit of output is called • Average cost is the total cost of When a firm's average cost curve crosses the marginal cost curve, average costs are When a firm's average cost is greater than marginal cost, then producing an additional unit of output will result in a fall in average cost marginal cost at a minimum at a maximum production production divided by the quantity of units producedUsing the following table, for each price level, calculate the optimal quantity of units for the firm to produce. Using the data from the graph to determine the firm’s total variable cost, calculate the profit or loss associated with producing that quantity. Assume that if the firm is indifferent between producing and shutting down, it will choose to produce. (Hint: Select purple points [diamond symbols] on the graph to receive exact average variable cost information.) Price Quantity Total Revenue Fixed Cost Variable Cost Profit (Dollars per instant pot) (Instant pots) (Dollars) (Dollars) (Dollars) (Dollars) 25.00 1,600,000 70.00 1,600,000 100.00 1,600,000
- Sandwiches, a sandwich shop, has the following marginal product curve (labelled MP) for its hourly productions hourly production.Consider the following table illustrating the production function of gadgets. Furthermore, suppose the firm has fixed costs of $2,000/day and the wage rate is $250/day. What is the firm's variable cost of producing 2,600 gadgets? a $1,000 b $1,750 c $2,000 d none of the aboveTwo months ago, on July 1, 2019, the State of Illinois raised gasoline taxes by $.19 (19 cents) per gallon of gas Question 3: For this question, please model the short-run impact of this tax on a typical Illinois gas station. The horizontal axis will be qgas (the output of this particular producer) and the vertical axis will measure price in dollars, $. This firm is subject to the Law of Diminishing Marginal Product. Begin by graphically depicting the “Family of Short Run Cost Curves” (AFC, AVC, ATC, MC) for this producer in late June, prior to the implementation of the new gasoline tax (you must submit a graph).
- Suppose the market price of oranges is $30.00 per crate. Characterize the farmers profit. at $30.00, the farmer will The figure illustrates the average total cost (ATC) and marginal cost (MC) curves for an orange farmer in California. Assume the market for oranges is perfectly competitive. Suppose the market price of oranges is $30.00 per crate. Characterize the farmer's profit. At a $30.00 price, the farmer will make a profit Oranges (crates in 100s) 0.00+ 4.00 8.00- 12.00- N Price and cost (dollars per crate) 10 11 52.00 60.00 56.00- M ATSuppose a firm’s total cost curve is TC = 50Q2 + 10Q + 800 and marginal cost is MC = 100Q + 10. Find the output level that minimizes average total cost and average variable cost, respectively.