Survey Of Economics
10th Edition
ISBN: 9781337111522
Author: Tucker, Irvin B.
Publisher: Cengage,
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Chapter 6, Problem 17SQ
To determine
The mareginal cost curve and the
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Students have asked these similar questions
Nokia sells a new budget cell phone. Based on information
provided by the accounting department, the average variable
cost is: AVC = $30 + Q
%3D
The average fixed cost is: AFC = $9,000,000/Q
where Q is the number of phones. The phone sells for $50.
Show your work/thought process:
a. Find the total cost, average cost, and marginal cost
equations.
b. At what level of output is average total cost minimized?
Why the average variable cost (AVC) and average total cost (ATC) curves are U-shaped (decreasing, reaches minimum and then increasing)?
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.
Chapter 6 Solutions
Survey Of Economics
Ch. 6.5 - Prob. 1YTECh. 6 - Prob. 1SQPCh. 6 - Prob. 2SQPCh. 6 - Prob. 3SQPCh. 6 - Prob. 4SQPCh. 6 - Prob. 5SQPCh. 6 - Prob. 6SQPCh. 6 - Prob. 7SQPCh. 6 - Prob. 8SQPCh. 6 - Prob. 9SQP
Ch. 6 - Prob. 10SQPCh. 6 - Prob. 11SQPCh. 6 - Prob. 1SQCh. 6 - Prob. 2SQCh. 6 - Prob. 3SQCh. 6 - Prob. 4SQCh. 6 - Prob. 5SQCh. 6 - Prob. 6SQCh. 6 - Prob. 7SQCh. 6 - Prob. 8SQCh. 6 - Prob. 9SQCh. 6 - Prob. 10SQCh. 6 - Prob. 11SQCh. 6 - Prob. 12SQCh. 6 - Prob. 13SQCh. 6 - Prob. 14SQCh. 6 - Prob. 15SQCh. 6 - Prob. 16SQCh. 6 - Prob. 17SQCh. 6 - Prob. 18SQCh. 6 - Prob. 19SQCh. 6 - Prob. 20SQCh. 6 - Prob. 21SQCh. 6 - Prob. 22SQCh. 6 - Prob. 23SQCh. 6 - Prob. 24SQCh. 6 - Prob. 25SQ
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- Which of the following measures of cost is best described as "the cost of a typical unit of output if total cost is divided evenly over all the units produced?" a. average variable cost b. average fixed cost c. marginal cost d. average total costarrow_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_forwardLesson 8 - Costs Question 4arrow_forward
- Which of the following is true of the relationship between Average Cost and Marginal Cost Select one: a. None of the answers given b. Average increases when marginal cost decreases c. Average costs decreases when marginal cost increases d. Average costs increases when marginal cost increasesarrow_forwardThe total cost equation for producing X widgets is given by TC = $1,000 + $6X. The marginal cost per widget at a production level of 300 units is closest to which of the following? a. $2,800 b. $6 c. $8 d. $4,000.arrow_forwardWhen marginal cost exceeds average total cost, a marginal cost must be rising. b average total cost must be falling. c average total cost must be rising. d average fixed cost must be rising.arrow_forward
- The total cost equation for producing X widgets is given by TC = $1,000 + $6X. The variable cost per widget is closest to which of the following? a. $1,000 b. $6 c. $8 d. $4,000.arrow_forwardGraphically show the relationship between the Avg. Variable Cost, Avg. Total Cost, and Marginal Cost curves. What question does the MC curve (along with the MR curve) answer What question does the ATC curve (along with the AR curve) answer? What question does the AVC curve (along with the AR curve) answer?arrow_forwardCost 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_forward
- Which of the following is always true?A) When marginal costs are less than average total costs, average total costs will be increasing.B) When average fixed costs are falling, marginal costs must be less than average fixed costs.C) When average fixed costs are rising, marginal costs must be greater than average total costs.D) When marginal costs are greater than average total costs, average total costs will be increasing.arrow_forwardA company is planning to manufacture mountain bikes. Fixed monthly cost will be $100,000 and it will cost $100 to produce each bicycle. a. Write the cost function, C, of producing x mountain bikes. b. Write the average cost function, C, of producing x mountain bikes. c. How many mountain bikes must be produced each month for the company to have an average cost of $300 per bike?arrow_forwardThe 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_forward
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