Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Chapter 7, Problem 24SQ
To determine
The firm with diseconomies of scale from 2,000 units onward.
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In the short run , a firms total cost is $200 if it does not produce any units of output. Its variable cost is $10 per unit . If the firm produces 5 units , variable costs are ____________, while fixed costs are_____________
a) $20; $200
b)$20; $250
c) $50;$200
d)$50;$250
e) $250;$450
In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then in this output range there are
Select one:
a. economies of scale
b. increasing marginal returns
c. diminishing marginal returns
d. decreasing marginal costs
e. diseconomies of scale
e) In the following diagram of cost curves, how many short runs have been
created?
State and explain which SRATC will be chosen if the firm wants to
produce at Q1, Q2 and Q3.
SRATC,
SRATC,
SRATC,
Q2
Q3
Quantity of Output
Average Total Cost (dollars)
Chapter 7 Solutions
Economics For Today
Ch. 7.5 - Prob. 1YTECh. 7 - Prob. 1SQPCh. 7 - Prob. 2SQPCh. 7 - Prob. 3SQPCh. 7 - Prob. 4SQPCh. 7 - Prob. 5SQPCh. 7 - Prob. 6SQPCh. 7 - Prob. 7SQPCh. 7 - Prob. 8SQPCh. 7 - Prob. 9SQP
Ch. 7 - Prob. 10SQPCh. 7 - Prob. 11SQPCh. 7 - Prob. 1SQCh. 7 - Prob. 2SQCh. 7 - Prob. 3SQCh. 7 - Prob. 4SQCh. 7 - Prob. 5SQCh. 7 - Prob. 6SQCh. 7 - Prob. 7SQCh. 7 - Prob. 8SQCh. 7 - Prob. 9SQCh. 7 - Prob. 10SQCh. 7 - Prob. 11SQCh. 7 - Prob. 12SQCh. 7 - Prob. 13SQCh. 7 - Prob. 14SQCh. 7 - Prob. 15SQCh. 7 - Prob. 16SQCh. 7 - Prob. 17SQCh. 7 - Prob. 18SQCh. 7 - Prob. 19SQCh. 7 - Prob. 20SQCh. 7 - Prob. 21SQCh. 7 - Prob. 22SQCh. 7 - Prob. 23SQCh. 7 - Prob. 24SQCh. 7 - Prob. 25SQ
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- The figure illustrates the short-run cost curves for a company that produces cell phones Identify the average total cost curve (ATC), the average vaniable cost curve (AVC), the average fixed cost curve (AFC), and the marginal cost curve (MC) in the figure. The ATC curve is the AVC curve is the AFC curve is and the MC curve is Cost (dollars per phone) 6800 64.00 60.00- 54.00 $2.00 48.00 44.00 40.00 36.00 32.00 28.00 24.00 2000- 16.00 12.00- 8.00 400 0.00 6 Quantity (cell phones in 1000s). 0₂ C₂ C₂ ROOarrow_forwardUse the concepts of economies and diseconomies of scale to explain the shape of a firm’s long-run ATC curve. What is the concept of minimum efficient scale? What bearing can the shape of the long-run ATC curve have on the structure of an industry?arrow_forwardThe above cost curves are for a firm producing flour, which is measured in pounds. 1. What is the firm's total cost when it produces 200 pounds of flour? ______(Enter only a number) 2. What is the firm's fixed cost? _____(Enter only a number) 3. What is the firm's average variable cost when it produces 200 pounds of flour? _____(Enter only a number)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_forwardNipam owns a firm that sells basketball apparel. As the firm's output increases, the firm's short-run marginal cost will eventually increase because of diseconomies of scale a lower product price inefficient production the firm's need to break even diminishing marginal productarrow_forwardConsider the following table of long-run total cost for four different firms: Which firms have diseconomies of scale over the entire range of output? a. Firm 1b. Firm 2c. Firm 3d. Firm 4e. Firm 2 and 4arrow_forward
- Costs in the short run versus in the long run help mearrow_forwardSection 11.5 The Short-Run and Long-Run Average Total Cost Curves exhibit 1 SRATC for small plant SRATC for medium plant SRATC tor large plant LRATC B $500 $400 Economies of Scale Constant Returns to Saie 1,000 1,200 Quantity of Computers (per day) Notice that the long-run average total cost (LRATC) curve is much flatter than the short-run average total cost (SRATC) curve. This is because firms can be more flexible in the long run-they can choose which short-run cost curve they want to operate along, by choosing their plant scale. But they cannot do this in the short run, during which they are stuck with their existing short-run cost curve. That is, in the short run, the firm operates with the short-run curve it has based on past decisions. However, in the lang run, the firm is able to choose the short-run curve it wants to use. In Exhibit 1 above, explain why the curve between A and B looks different than the curve from A to C. Provide an example of how a firm could opt to follow the…arrow_forwardShort-run average total cost shows the minimum average total cost for each level of output that can be produced has a minimum point at the firm's minimum cost for that relevant range of production might have a upward-sloping segment that indicates dis-economies of scale might have a flat portion that indicates a constant average cost over that range of output. might have a downward-sloping segment that indicates economies of scalearrow_forward
- In the short run, which cost is fixed and cannot be changed? a) Average cost b) Marginal cost c) Total cost d) Variable costarrow_forwardSuppose a firm's marginal cost is increasing as it produces more output. Then the firm is said to be experiencing which of the following? a.increasing returns to scale b.diminishing returns to scale c.losses d.profitarrow_forwardGive business examples of short-run costs, economies of scale, and minimum efficient scale (MES).arrow_forward
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