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 7MC
To determine
Diminishing marginal return.
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Students have asked these similar questions
“Diminishing Marginal Returns” is achieved when?
Explain the idea behind diminishing marginal returns and give a real-life example.
Connor produces and sells Thirium (a type of mineral). When Connor produces 10 containers of Thirium, the total cost is $125. When Connor produces 11 containers of Thirium, the total cost is $160. What is Connor's marginal cost of producing the eleventh container of Thirium?
Select one:
a. $40
b. $160
c. $35
d. $125
e. $25
Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- 1. How does fixed cost affect marginal cost? Why is this relationship important? 2. Is it possible for total utility to increase while marginal utility diminishes? Explain. 3. Define economies of scale and explain why they might arise. Define disecononies of scale and explain why they might arise.arrow_forwardWhat economic principle explains why average variable costs and marginal costs initialy decrease as output increases?arrow_forward1arrow_forward
- What are diseconomies of scale? Diseconomies of scale is A. when the marginal product of labor is decreasing with output. B. when the marginal cost of production is increasingwith output. C. when a firm's long-run average costs decrease with output. D. when a firm's long-run average costs increase with output.arrow_forwardRefer to the table below. How will the marginal cost curve look like if you draw it? Units of Output Total Cost 10 20 20 40 30 60 40 80 50 100 60 120 Select one: a. upward sloping b. downward sloping c. horizontal d. verticalarrow_forwardModified True or False: State whether each statement is true or false. If the statement is false, briefly explain why it is so, and then restate it to make it true. h. The optimal scale of plant is the scale of plant that maximizes average cost.arrow_forward
- Consider a company using the economic production quantity model. a. Derive the percent change of total cost if the lot size is different than the optimal by a factor of (1+z). b. How would the total cost change if the holding cost in the model is reduced 30 percent? c. Derive the percent cost difference if decide to increase production rate by a factor of (1+w)arrow_forwardWhat effect, if any, does diminishing marginal product have on the shape of the marginal cost curve?arrow_forwardLike Loyola, many universities have either a college football program or a basketball program. Relatively few have both. This indicates the presence of A. economies of scope. B. diseconomies of scope. C. returns to scale. D. the law of diminishing marginal returns. E. None of the above.arrow_forward
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