Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 7, Problem 2MC
To determine
Economies of scale.
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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.
This refers to the ratio of a small increment of cost and a small increment of output.
a. Increment cost
b. Marginal cost
c. Differential cost
d. All of these
Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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