Answered: Refer to Figure 1. Which of the…

Refer to Figure 1. Which of the short-run average cost curves correctly depict economies to scale? Figure 1-Short-Run Average Cost Curves Cost www

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Explain the differences between diminishing marginal returns and diseconomies of scale.

A: Since the marginal return can be defined as the additional return by purchasing an additional…

Q: When there are positive fixed costs, can the average variable cost curve and average total cost…

A: We have 3 different costs, ATC, AVC and AFC where ATC is the sum of AVC and AFC. Given that are…

Q: Marginal cost intersects average total cost at minimum average total cost. True False

A: The price curve always intersects the typical total cost curve at its lowest point because the…

Q: Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only…

A: Given: To Find: The short-run total cost if Ike's Bikes is currently producing 600 bikes: The…

Q: The government imposes a $1,000 per year license fee on all pizza restaurants. As a result, which…

A: Fixed costs are costs that do not vary with changes in the level of output or sales. They are…

Q: The total cost equation for producing X widgets is given by TC = $1,000 + $6X. The average cost per…

A: Answer - Given in the question - TC = $1,000 + $6X Here TC = Total cost X is no. of widget Need…

Q: Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the…

A: Formulas to be used:TC = VC+FCATC = TC/QAVC = TVC/QAFC = TFC/OMC = TCn - TCn-1

Q: Why does the difference between AVC and ATC get smaller as Q increases? b) Why does MC intersect…

A: Since you have asked multiple questions we will answer the first three for you. The average cost…

Q: When marginal cost exceeds average total cost, which of the following must be true? Question 14…

A: Costs are the expenses that a firm incurs in the form of the purchase of inputs to produce goods and…

Q: Discuss some of the difficulties encountered in applying these economic concepts in practical…

A: The fixed cost is the cost which remains the same even when the firm produces nothing as output.…

Q: At the point where marginal cost equals average total cost, average total cost will be increasing.…

A: The marginal cost refers to the change in total cost when one additional unit of output is produced.…

Q: Discuss the connection between returns to scale and diminishing marginal product. Provide graphs to…

A: Definitions In the short run, increasing input after reaching maximum capacity while keeping at…

Q: If Boeing produces 9 jets per month, its long-run total cost is $9.0 million per month. If it…

A: Economics of scale: It refers to the situation when increasing production leads to falling per unit…

Q: 3. Nokia sells a new budget cell phone. Based on information provided by the accounting department,…

A: Given The average variable cost for Nokia cell phone: AVC=$30+Q .........(1) Average…

Q: Chapter 22 Supply: The Costs of Doing Business Why does the minimum point of the average-total-cont…

A: Fixed costs are the costs that do not change with the number of units produced. These costs are…

Q: Given the cost information below, answer the following questions. Output Total Cost $ 40.00 10…

A: a.Total fixed cost is equal to total cost when output is…

Q: Define economics of scale and explain they might arise. Define diseconomies of scale and explain why…

A: Economies of scale apply to the property that as the quantity of product increases, the long-run…

Q: Average total cost intersects marginal cost at minimum marginal cost. True False

Concept explainers

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.

Question

Refer to Figure 1. Which of the short-run average cost curves correctly depict economies to scale?
Figure 1-Short-Run Average Cost Curves
Cost
Long Description
a. a-c.
b. a-d.
c. d-e.
d. e-g.
tit
Quantity of Output

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Marginal cost curve always cuts the lowest point of the average total cost curve. Do you agree? Explain.
1) Define total cost, average total cost, and marginal cost. How are they related?
Which of the following cost curves is never U-shaped? a. the average fixed cost curve b. the average total cost curve c. the marginal cost curve d. the average variable cost curve
If the average variable cost of producing 5 costumes in Kira’s Costume Shop is $50, and the fixed cost of the shop is $100, what is the total cost for 5 costumes? A. $350 B. $50 C. $250 D. $150
(1) Use the graph to answer the question. Between points C and D, the long-run average total cost curve is characterized by ________ because the firm is experiencing ________ returns to scale. A-constant returns; constant. B-economies of scale; increasing. C-economies of scale; constant D-diseconomies of scale; increasing. E-diseconomies of scale; decreasing The graph is attached on the following (2) If a firm is operating at a point on its long-run average total cost curve where the slope is negative, it is A-experiencing increasing returns to scale. B-experiencing constant returns to scale C-experiencing decreasing returns to scale. D-achieving efficient scale. E-making progressively less as it increases its inputs (3) If a firm is maximizing its profit and is earning positive economic profit, which of the following must be true? A-Average total cost < price; marginal cost = marginal revenue B-Average total cost > price; marginal cost = marginal revenue C-Average…
How does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model in the photo to answer
The government imposes a $1,000 one-time license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.
The total cost equation for producing X widgets is given by TC = $1,000 + $6X. The variable cost per widget is closest to which of the following? a. $1,000 b. $6 c. $8 d. $4,000.
Solve for the missing entries in the above table. Enter whole dollar values for Total and Marginal Cost calculations. Round all average cost calculations to the nearest cent. Enter your answers in the following format: A. $5 B. $18 C. $40 etc. (Note, this is just an example, these are NOT the correct answers.)
Given the cost information below, answer the following questions. Output Total Cost $10.00 10 88.40 20 133.20 30 158.80 40 179.60 50 210.00 Instructions: Enter your answers rounded to two decimal places. a. When output is 10, total variable cost is $ b. When output is 20, average fixed cost is $ c. When output is 30, average variable cost is $ d. When output is 40, average total cost is $ e. When output is 50, marginal cost is $
Calculate total costs at 4 units of output. Do not put a dollar sign in your answer. (The 6 columns are Quantity, Total Fixed Cost, Total Variable Cost, Total Cost, Average Total Cost, and Marginal Cost. The Quantity and Total Variable Cost columns have been filled in along with the first row for Total Fixed Cost. Average Total Costs and Marginal Costs are not calculated at a quantity of 0.) Quantity Total Fixed Cost Total Variable Cost Total Cost Average Total Cost Marginal Cost 0 15 0 XXXXX XXXXX 1 25 2 40 3 50 4 55 5 65 Calculate average total costs at 2 units of output. Calculate average total cost at 5 units of output. Calculate marginal cost at 4 units of output (moving from 3 units to 4 units). Can you tell if this is the short run or long run? Can you tell at which level of output profits will be maximized?
Joanne sells silk screened T-shirts at community festivals and craft fairs. Her marginal cost to produce one T-shirt is $3.50. Her total cost to produce 70 T-shirts is $305, and she sells them for $7 each a. Find the linear cost function for Joanne's T-shirt production b. How many T-shirts must she produce and sell in order to break even? c. How many T-shirts must she produce and sell to make a profit of $700? a. The linear cost function is C(x)= b. Joanne must produce and sell c. Joanine must produce and sell T-shirts in order to break even, because the number of T-shirts must be a whole number T-shirts to make a profit of $700, because the number of T-shirts must be a whole number