Ty grows pumpkins. When Ty leases 1 field for $60 a day and capital for $40 a day, his average total cost curve is ATC₁. When Ty leases 2 fields for $120 a day and capital for $80 a day, his average total cost curve is ATC₂2 Draw a point on Ty's average cost curve such that he will use 1 field to grow any smaller quantity and 2 fields to grow any larger quantity. Ty's long-run average cost curve is OA. the same as his ATC, curve OB. the same as his ATC₂ curve OC. made up of the segments of his ATC, and ATC₂ curves that have the higher average total cost OD. made up of the segments of his ATC, and ATC₂ curves that have the lower average total cost 2.50 2.00- 1.50 1.00 ATC₁ Average total cost (dollars per pumpkin) 050- 0.00+ 0 ATC₂ 200 400 600 800 1000 1200 1400 Quantity (pumpkins per day)

Ty grows pumpkins. When Ty leases 1 field for $60 a day and capital for $40 a day, his average total cost curve is ATC₁. When Ty leases 2 fields for $120 a day and capital for $80 a day, his average total cost curve is ATC₂2 Draw a point on Ty's average cost curve such that he will use 1 field to grow any smaller quantity and 2 fields to grow any larger quantity. Ty's long-run average cost curve is OA. the same as his ATC, curve OB. the same as his ATC₂ curve OC. made up of the segments of his ATC, and ATC₂ curves that have the higher average total cost OD. made up of the segments of his ATC, and ATC₂ curves that have the lower average total cost 2.50 2.00- 1.50 1.00 ATC₁ Average total cost (dollars per pumpkin) 050- 0.00+ 0 ATC₂ 200 400 600 800 1000 1200 1400 Quantity (pumpkins per day)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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