Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 7QE
(a)
To determine
Explain why the long run
(b)
To determine
Explain why the long run average total cost curve slopes eventually upward.
(c)
To determine
Explain the shape of short run cost curve.
(d)
To determine
Explain the fixed cost component in long run cost curve.
(e)
To determine
Explain the long run cost curve.
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The government imposes a $1,000 per year 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.
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Chapter 12 Solutions
Microeconomics
Ch. 12.1 - Prob. 1QCh. 12.1 - Prob. 2QCh. 12.1 - Prob. 3QCh. 12.1 - Prob. 4QCh. 12.1 - Prob. 5QCh. 12.1 - Prob. 6QCh. 12.1 - Prob. 7QCh. 12.1 - Prob. 8QCh. 12.1 - Prob. 9QCh. 12.1 - Prob. 10Q
Ch. 12.A - Prob. 1QECh. 12.A - Prob. 2QECh. 12.A - Prob. 3QECh. 12.A - Prob. 4QECh. 12.A - Prob. 5QECh. 12.A - Prob. 6QECh. 12.A - Prob. 7QECh. 12 - Prob. 1QECh. 12 - Prob. 2QECh. 12 - Prob. 3QECh. 12 - Prob. 4QECh. 12 - Prob. 5QECh. 12 - Prob. 6QECh. 12 - Prob. 7QECh. 12 - Prob. 8QECh. 12 - Prob. 9QECh. 12 - Prob. 10QECh. 12 - Prob. 11QECh. 12 - Prob. 12QECh. 12 - Prob. 13QECh. 12 - Prob. 14QECh. 12 - Prob. 15QECh. 12 - Prob. 16QECh. 12 - Prob. 17QECh. 12 - Prob. 1QAPCh. 12 - Prob. 2QAPCh. 12 - Prob. 3QAPCh. 12 - Prob. 4QAPCh. 12 - Prob. 5QAPCh. 12 - Prob. 1IPCh. 12 - Prob. 2IPCh. 12 - Prob. 3IPCh. 12 - Prob. 4IPCh. 12 - Prob. 5IPCh. 12 - Prob. 6IP
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- What is a long-run average cost curve?arrow_forwardAverage cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then increasing. Marginal cost curve have the same shape, though this may be harder to see since most of marginal cost curve is increasing . Do you think that average and marginal cost curve have the same general shape and why ?arrow_forwardAverage cost curves (except for average fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Do you think that average and marginal cost curves have the same general shape and why?arrow_forward
- The cost curve for producing widgets passes through the following points and is piecewise linear in between. Solve, a. What is the fixed cost of producing 600 widgets? b. What is the variable cost of producing 600 widgets? c. What is the cost per unit if only 400 widgets are produced?arrow_forwardWhen plotting marginal and average cost curves, the cost curve always crosses the cost curve at its Select one: a. average fixed; marginal; minimum b. marginal; average variable; maximum c marginal; average total; minimum d. average variable; marginal; maximumarrow_forwardWhich 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 curvearrow_forward
- How do you find total fixed cost?arrow_forwardThe Santa Clara County increases the property taxes for all fast food restaurants. Which cost curves will be affected as a result of this policy? 1. average total cost and average fixed cost. 2. average variable cost and average total cost. 3. average variable cost and marginal cost. 4. average variable cost and average fixed cost.arrow_forwardTrue or False The slope of the total cost curve is equal to marginal cost, or the change in variable cost divided by the change in output.arrow_forward
- Cost curves. a) Why does the difference between AVC and ATC get smaller as Q increases? b) Why does MC intersect AVC and ATC at their minimum points? c) Explain the difference between the short run and the long run. d) What is meant by “economies of scale”? (Hint: it has to do with long run average cost) e) Give an example of economies of scale and explain.arrow_forwardb. How is a long-run average cost curve different from a short-run average cost curve? How are they relatedarrow_forwardDefine total cost, average total cost, and marginal cost. How are they related?arrow_forward
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