Let's explore how rising costs helped to kill off most printed newspapers after the Internet became available in the mid-1990s. Imagine that you are a newspaper publisher in the year 2004. You are in the middle of a one-year factory rental contract that requires you to pay $700,000 per month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have a marginal printing cost of $0.35 per paper as well as a marginal delivery cost of $0.10 per paper. Instructions: Enter your answers rounded to two decimal places. a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per newspaper? AFC per newspaper (Click to select) + from $ | b. What happens to the MC per newspaper? MC per newspaper (Click to select) to $ c. What happens to the minimum amount that you must charge to break even? It (Click to select) : from $ to $

Let's explore how rising costs helped to kill off most printed newspapers after the Internet became available in the mid-1990s. Imagine that you are a newspaper publisher in the year 2004. You are in the middle of a one-year factory rental contract that requires you to pay $700,000 per month, and you have contractual salary obligations of $1,250,000 per month that you can't get out of. You also have a marginal printing cost of $0.35 per paper as well as a marginal delivery cost of $0.10 per paper. Instructions: Enter your answers rounded to two decimal places. a. If sales fall by 20 percent from 1,000,000 newspapers per month to 800,000 newspapers per month, what happens to the AFC per newspaper? AFC per newspaper (Click to select) + from $ | b. What happens to the MC per newspaper? MC per newspaper (Click to select) to $ c. What happens to the minimum amount that you must charge to break even? It (Click to select) : from $ to $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Assume there is a linear isoquant where the input combination K = 10, L = 0 produces Q = 100. Assume that this isoquant has a MRTS (marginal rate of technical substitution) such that an increase in L by 1 unit requires the firm to give up – ½ unit of K. Assume PL = $1 and PK = $1. What is the smallest total cost necessary to produce Q = 100? $20 $10 $50 $100
An ag firm is looking to produce 30 units of output. If the firm were to operate at the least-cost level of inputs to reach 30 units of output and their rental rate on capital equals $50 per hour while their wage rate equals $10 per hour, what is the total cost for the firm for operation at that level?
If You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. then your accounting profit is: Select one: a. 20,000 Ob. 30,000 O c. 40,000 O d. 10,000 O e. 60,000
Use the cost table below to find the following marginal costs. Output quantity Total variable Total fixed Total cost cost cost 20 80 60 140 40 140 60 200 60 210 60 270 80 300 60 360 100 420 60 480 120 600 60 660 140 840 60 900 What is the marginal cost when output is 20? $ What is the marginal cost when output is 80? $ What is the marginal cost when output is 120? $ |
Suppose that the production function for Hannah and Sam's home remodeling business is Q=f(L,K) Q=1040.2K0.3 Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $2,000 per week. a. What is the least-cost input combination for remodeling 100 square feet each week? Instructions: Round your answers to 2 decimal places. units of labor and units of capital. b. What is the total cost? Instructions: Round your answer to 2 decimal places.
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 520 660 800 1 2 3 Q=200 400 480 560 Average Total Cost (Dollars per bike) Q=300 Q=400 320 400 On th 320 400 320 320 Q = 500 560 480 400 Q = 600 800 660 520 per bike. Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using one factory two factories green plot the three short-run average total cost curves (SRATC) for Ike's Bikes from…
Consider a company that has fixed costs of $6,700 and a marginal cost of $26 per item. What is the company's average cost function? How many items must the company produce to have an average cost of $36.31 per item?
Making dresses is a labor-intensive process. Indeed, the production function of a dressmaking firm is well described by the equation Q = L − L2∕800, where Q denotes the number of dresses per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $20 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $40. Over the next two years, labor costs are expected to be unchanged, but dress prices are expected to increase to $50. What effect will this have on the firm’s optimal output? A- Increase B- Decrease C- No Effect
You run a school in Florida. Fixed monthly cost is $5,837.00 for rent and utilities, $6,127.00 is spent in salaries and $1,459.00 in insurance. Also every student adds up to $103.00 per month in stationary, food etc. You charge $684.00 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,946.00, salaries to $6,128.00 and insurance to $2,040.00 per month. Variable cost per student will increase up to $166.00 per month. However you can charge $1,042.00 per student. How much do you currently charge per student? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Complete the cost schedule below for the Ozzie Ugg Boot Co. Total product (Q) Total fixed cost (TFC) Total variable cost (TVC) Total Cost (TC) Marginal Cost (MC) Average fixed cost (AFC) Average variable cost (AVC) Average total cost (ATC) 0 $50 $50 C 1 $80 D 2 B $95 E 3 A $105 F 4 $110 I G 5 $130 H 6 $160 J List the values that you obtained for the letters A to J in your answer (no more than 2 decimal places). What is the most efficient level for the company to produce its product? Why?
The long-run cost function for a firm in the personal computer business is: C(q) = 8q² + 7200, for q> 0. What is the average cost function AC (g)? AC (q) = 16q AC (q) = 8q+ 7200 9 AC (q) = 16q+ AC (g) 16q+7200 AC(q) = 8q+7200 = 7200 9 The long-run cost function for a firm in the personal computer business is: C(q) = 8q² + 7200. for q> 0. What is the marginal cost function MC (q)? MC(q) = 8q+7200 MC(q) = 8q MC (g) MC (q) = 16q MC (q) = 16q+ 16q+72000 7200 The long-run cost function for a firm in the personal computer business is: C(q) = 8q²+7200, for q> 0. At what level of output does average cost equal marginal cost? The level of output at which average cost and marginal cost are equal is type your answer... -01
1a) A firm’s estimated long-run total cost function is LRTC = 160Q - .6Q2 + .002Q3. Suppose the firm is producing 100 units of output. The cost elasticity is ____ You can use Excel spreadsheet or otherwise to answer this question. b) A research study published in Social Science Medicine, “Production Functions for General Hospitals,” estimated the following general hospital production function in the Netherlands: Q = 5*Staff.34*Beds.64*Drugs.04*Specialists.02, where Q is a measure used by the authors for patient care. Suppose a hospital currently utilizes the following inputs: Staff =20, Beds = 120, Drugs = 60, Specialists =10. Use a spreadsheet to find the following or otherwise. If the hospital increases its specialists by one (1), that is, employs an 11th specialist, the increase in Q (marginal product) will be: c) A study published in Social Science Medicine, “Production Functions for General Hospitals,” estimated the following general hospital production function: Q =…