ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 6P
To determine
The curves in the following graphs
Concept Introduction:
Average Cost refers to total cost of production per unit of output.
Marginal Cost refers to total cost for producing an additional unit of the product.
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Douglas Fur is a small manufacturer of fake-fur boots in New York City. The following table shows the company's total cost of production at various
production quantities.
Fill in the remaining cells of the following table.
Variable Cost
Average Variable Cost
Average Total Cost
Quantity
Total Cost
Marginal Cost
Fixed Cost
(Dollars)
(Dollars)
(Dollars)
(Dollars per pair)
(Dollars per pair)
(Pairs)
(Dollars)
120
1
200
240
285
4
340
425
540
On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost
(AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For
ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $200, so you should start your ATC curve by
placing a green point at (1, 200). For MC, plot the points between the integers: For example, the MC of…
E1
Chapter 7 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?arrow_forwardCompute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.arrow_forwardQuestion attachedarrow_forward
- Economic Graph the total cost curves as well as the average and marginal cost curves.arrow_forwardMicroeconomics - Production FunctionA firm produces shoes using labor (L) and machinery (K) as factors of production. Its production function is Q = K1/3 * L2/3. Answer:(a) is the marginal product of labor (MPL) decreasing?b) is the average product of labor (APL) decreasing?c) what is the relationship between the average product (AP) and marginal product (MP) curves?d) what type of returns to scale does Q exhibit?arrow_forwardexplain with diagramarrow_forward
- Which of the curves in the following graph is the average total cost curve?arrow_forward340 425 540 On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC curves, plot the points on the integer; for example, the average total cost of producing one pair of boots is $200, so you should start your ATC curve by placing a green point at (1, 200). For marginal cost, plot the points between the integers; for example, the marginal cost of increasing production from zero to one pair of boots is $80, so you should start your MC curve by placing an orange square at (0.5, 80).) Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 200 175 ATC 150 125 - AVC 100 MC 75 50 25 1 4 QUANTITY OF OUTPUT (Pairs of boots) COSTS (Dollars per pair) 8 6arrow_forward(Figure: The Average Total Cost Curve for Shoes) Use Figure: The Average Total Cost Curve for Shoes. The total cost of producing 10 pairs of shoes is approximately: Average total cost of pair of shoes ATC $140 120 100 80 60 40 20 I 0 1 2 3 4 5 6 7 8 9 10 Quantity of shoes (pairs) a) $54. Ob) $131. c) $13. O d) $1,308.arrow_forward
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