Use the following data to draw a long-run average total cost curve. Label the range of diseconomies of scale, constant returns to scale, and economies of scale. Quantity LRATC Per unit cost A 5 $11 $12.00 10 $8 $10.00 15 $7 $6 $6 $6 20 $8.00 25 $6.00 30 35 $7 $4.00 40 $10 $2.00 45 $12 10 45 Quantity 15 25 30 35 40 a. What is this firm's minimum efficient level of production? b. What can you conclude about the short run cost of producing 25 units of output? 20
Use the following data to draw a long-run average total cost curve. Label the range of diseconomies of scale, constant returns to scale, and economies of scale. Quantity LRATC Per unit cost A 5 $11 $12.00 10 $8 $10.00 15 $7 $6 $6 $6 20 $8.00 25 $6.00 30 35 $7 $4.00 40 $10 $2.00 45 $12 10 45 Quantity 15 25 30 35 40 a. What is this firm's minimum efficient level of production? b. What can you conclude about the short run cost of producing 25 units of output? 20
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
How would I do this?
Transcribed Image Text:Use the following data to draw a long-run average total cost curve. Label the range of
diseconomies of scale, constant returns to scale, and economies of scale.
Quantity
LRATC
Per unit cost A
5
$11
$12.00
10
$8
$10.00
15
$7
$6
$6
20
$8.00
25
$6.00
30
$6
35
$7
$4.00
40
$10
$2.00
45
$12
10
45 Quantity
15
20
25
30
35
40
a.
What is this firm's minimum efficient level of production?
b. What can you conclude about the short run cost of producing 25 units of output?
c. If the owner of this firm told you that they were currently producing 15 units of output and
that the average cost was $7.50, what can you conclude about the technical efficiency and
economic efficiency of this firm?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
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.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
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)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
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-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education