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 6QR
To determine
An average total cost curve and the marginal cost curve.
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Draw the marginal-cost and average-total-cost curves for a typical firm. Explain why the curves have the shapes that they do and why they cross where they do.
Explain the shapes of the marginal and average cost curves of a firm. Use a diagram to support your answer.
Graph the following:
Average Total Cost curve and Average Variable Cost curve with proper positioning
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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- Construct the cost schedule using the data. below for a firm operating in the short run. Graph the average variable cost, average total cost, and marginal cost curves.arrow_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_forwardWhy does the average fixed cost falls with the increase in output?arrow_forward
- Draw the short-run average total cost (ATC), average variable cost (AVC), and marginal cost (MC) curves for a bicycle factory. Assume the usual U-shapes. Label everything. Show the efficient scale at a quantity of 120 bicycles.arrow_forwardA firm has the following average total cost curves: Quantity ATC11 ATC22 ATC33 ATC44 1 100 150 50 200 2 80 130 45 170 3 60 110 40 140 4 50 90 45 110 5 55 70 60 90 6 85 60 80 70 7 120 75 100 65 In the long run what is the average total cost when five goods are produced? $arrow_forwardAverage total cost, average variable cost marginal cost and marginal product b. The relationship between marginal product and marginal cost is reciprocal or opposite. Why is it so? Explain.arrow_forward
- The 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_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_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
- Average 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_forwardWhat is the shape of the average variable and average total cost curves and average fixed cost? Explain the reason for these shapes. Why is long run average cost curve known as envelope curve? Answer in 1000 wordsarrow_forwardEach graph below illustrates three short run cost curves for firms, where ATC is Average Total Cost (aka Average Cost), MC is Marginal Cost, and AVC is Average Variable Cost. Based on what you know about the relationships between these curves, which of the following graph is correct? MC ATC ATC AVC AVC B. MC MC ATC AVC ATC AVC D. MC AVC ATC E. D. OAarrow_forward
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