Sea lions have been depleting the stock of steelhead trout. One idea to scare sea lions off the Washington state coast was to launch fake killer whales, predators of sea lions. The cost of making the first whale is $25,000—$7,000 for materials and $18,000 for the mold. The mold can be reused to make additional whales, so additional whales would cost $7,000 apiece. a. Calculate the total cost and average total cost of producing 1 to 10 fake killer whales by filling in the table below. Instructions: Enter your responses rounded to the nearest whole number.   Quantity Total Costs of Mold ($) Total Costs of Materials ($) Total Costs ($)    Average Total Costs ($) 1 18,000 7,000 25,000   2         3         4         5         6         7         8         9         10         b. Does production of fake whales exhibit diseconomies of scale, economies of scale, or constant returns to scale?      Diseconomies of scale Constant returns to scale Economies of scale c. What is the fixed cost of producing fake whales? Instructions: Enter your response rounded to the nearest whole number.     $  d. What is the variable cost of producing each fake whale? Instructions: Enter your response rounded to the nearest whole number.     $

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Sea lions have been depleting the stock of steelhead trout. One idea to scare sea lions off the Washington state coast was to launch fake killer whales, predators of sea lions. The cost of making the first whale is $25,000—$7,000 for materials and $18,000 for the mold. The mold can be reused to make additional whales, so additional whales would cost $7,000 apiece.

a. Calculate the total cost and average total cost of producing 1 to 10 fake killer whales by filling in the table below.

Instructions: Enter your responses rounded to the nearest whole number.
 

Quantity Total Costs
of Mold ($)
Total Costs
of Materials ($)
Total Costs
($)

 
 Average Total Costs ($)
1 18,000 7,000 25,000  
2        
3        
4        
5        
6        
7        
8        
9        
10        


b. Does production of fake whales exhibit diseconomies of scale, economies of scale, or constant returns to scale?

    

  • Diseconomies of scale
  • Constant returns to scale
  • Economies of scale



c. What is the fixed cost of producing fake whales?

Instructions: Enter your response rounded to the nearest whole number.

    $ 

d. What is the variable cost of producing each fake whale?

Instructions: Enter your response rounded to the nearest whole number.

    $ 

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Costs
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
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education