The last column of Table 2.2 shows the marginal cost of Good U, which we also assume that the fixed cost of production is RM2000. Marginal cost of Good U (RM) Good U (units) 100 10 200 5 300 400 2 500 3.5 600 4.5 700 8 800 11 900 13 1000 18 Table 2.2 i. Compute the average cost based on Table 2.2. ii. We cannot use the cost information in the last column of Table 2.2 to determine whether the production of Good U shows economies or diseconomies of scale. TRUE / FALSE iii. Until which output level that that the production starts to exhibit diseconomies of scale? Why?

The last column of Table 2.2 shows the marginal cost of Good U, which we also assume that the fixed cost of production is RM2000. Marginal cost of Good U (RM) Good U (units) 100 10 200 5 300 400 2 500 3.5 600 4.5 700 8 800 11 900 13 1000 18 Table 2.2 i. Compute the average cost based on Table 2.2. ii. We cannot use the cost information in the last column of Table 2.2 to determine whether the production of Good U shows economies or diseconomies of scale. TRUE / FALSE iii. Until which output level that that the production starts to exhibit diseconomies of scale? Why?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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