Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337378710
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 13, Problem 3CQQ
To determine
Marginal cost and average variable cost .
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Students have asked these similar questions
K
Click on the table icon that shows the fixed costs, variable costs, and total
costs for different output levels.
Then use this data to help fill in the missing information in the table below.
Quantity
Average
Fixed Cost Variable Cost
Average
Average
Total Cost
0
1
$12
$5.00
2
$17
14.00
3
4.00
Using the same table
what is the marginal cost of the third unit produced?
A. 5.
B. 0.
OC. 15.
OD. 11.
The graph on the right shows the cost curves for a random firm competing in a
O
Price
I already filled out the table, but I don't understand how to answer 3. a, b, and c.
The table below shows the cost of producing model vintage cars for collectors.
Instructions: Enter your answers as a whole number.
a. Complete the marginal cost column in the table.
Vintage Model Car Production Costs
Total Fixed Cost
Total Variable
Cost (dollars)
Total Cost
(dollars)
$2,000
(dollars)
$2,000
Marginal Cost
(dollars)
Output
$0
1
2,000
600
2,600
2,000
1,100
3,100
2,000
1,900
3,900
4
2,000
2,900
4,900
5.
2,000
4,150
6,150
b. What is the total cost of producing 4 vintage model cars?
2.
c. What is the marginal cost of producing the 4th vintage model car?
2.
Chapter 13 Solutions
Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
Ch. 13.1 - Prob. 1QQCh. 13.2 - Prob. 2QQCh. 13.3 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQ
Ch. 13 - Prob. 1QRCh. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - Prob. 6PACh. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PA
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- answer quicklyarrow_forwardComplete the table by filling in the average fixed cost, average variable cost, and average total cost. Instructions: Round your answers to 2 decimal places. Vintage Model Car Production Costs Output Total Fixed Cost (dollars) Total Variable Cost (dollars) Total Cost (dollars) Average Fixed Cost (dollars) Average Variable Cost (dollars) Average Total Cost (dollars) 0 $2,000 $0 $2,000 — — — 100 2,000 800 2,800 200 2,000 1,300 3,300 500 2,000 4,350 6,350arrow_forwardThe following table shows data for quantity (Q), variable cost (VC), and fixed cost (FC) for a ski company. a) Fill the table for total cost (TC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC). Make sure to show your work for at least one line. Q VC FC TC ATC AVC MC 30 1 10 30 25 30 3 45 30 4 70 30 100 30 6 135 30 b) Now suppose the firm decides to produce a quantity of 5 units (Q=5), and it sells for a price of $25 each. Answer the following: 1. Calculate the company's profits or losses 2. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? 3. At the given quantity and price, is the marginal unit produced adding or subtracting to profits? Should the fırm produce at this level of output?arrow_forward
- Question 4 Use the following table for the (i),(ii) and (iii) questions. Quantity Total fixed cost Total variable cost 0 $800 $0 1 $800 $50 2 $800 $100 3 $800 $150 4 $800 $200 (i) What is the marginal cost of the third unit? A: $0 B: $50 C: $150 D: $250 (ii) What is the average total cost at the quantity of 4? A: $100 B: $150 C: $200 D: $250 (iii) From the information in the table above, is the marginal product diminishing? A: Yes, because the total cost is increasing as the quantity increases. B: Yes, because the total variable cost is increasing as the quantity increases. C: No, because the marginal cost is not increasing as quantity increases. D: No, because the total fixed cost is not increasing as quantity increases.arrow_forwardWhich type of cost does depend on a firm's output? 1.marginal cost 2.total cost 3.variable cost 4.all of the abovearrow_forwardThe 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.arrow_forward
- Suppose a firm producing table lamps has the following costs: Quantity Average Total Cost 1,000 $15.00 2,000 9.75 3,000 8.25 4,000 7.50 5,000 7.75 6,000 8.50 7,000 9.75 8,000 10.50 9,000 12.00 Ben and Jerry are managers at the company, and they have this discussion: Ben: We should produce 4,000 lamps per month because that will minimize our average costs. Jerry: But shouldn't we maximize profits rather than minimize costs? To maximize profits, don't we need to take demand into account? Ben: Don't worry. By minimizing average costs, we will be maximizing profits. Demand will determine how high the price we can charge will be, but it won't affect our profit-maximizing quantity. Evaluate the discussion between the two managers. Ben's assertion that the firm should produce the quantity of lamps where average costs are minimized is A. incorrect because profits are instead maximized…arrow_forwardSuppose, Home Style is a well-known furniture manufacturer in the Sultanate. To meet the increasing demand, the company increased the production of some furniture items. As a result, there was an increase in the cost of raw materials such as plywood, timber and plastic etc. What do you call the amount spent by Home Style on these resources? a. Indirect cost b. Implicit cost c. Average cost d. Variable costarrow_forwardYour company sells Beyonce concert DVDS. Total fixed costs for your operation are $10,000 a year. The variable costs are: 50Q – Q (Q is in hundreds) The firm pays $500 a year in various taxes. The market price of these DVDS is $40. Beyonce has many fans. Show your work/thought process: a. Should the firm shut down in the short run? Explain. b. If the firm's fixed costs decreased from $10,000 to $8,000, would the firm shut down in the short run?arrow_forward
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