Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134421315
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 8, Problem 1.6P
To determine
The fixed cost and variable cost.
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Please assist on answering the questions below (microeconomics)
In the following table, complete the marginal cost, average variable cost, and average total cost columns.
Quantity
Variable Cost
Total Cost
Marginal Cost
Average Variable Cost
Average Total Cost
(Vats of juice) (Dollars)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
30
1
35
15
45
3
30
60
50
80
75
105
105
135
On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Jane's Juice Bar. (Note: Be sure to plot from left to
right and to plot between integers. For example, if the marginal cost of increasing production from 1 vat of juice to 2 vats of juice is $5, then you
would plot a point at (1.5, 5).) Then use the purple points (diamond symbol) to plot the average-variable cost curve starting at 1 vat of juice, and use
the green points (triangle symbol) to plot the average-total-cost curve also starting at 1 vat of juice.
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Chapter 8 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
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- Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?arrow_forwardThe government imposes a $1000 per year license fee on all pizza restaurants. As a result, which cost curves shift? average total cost and average fixed cost average total cost and marginal cost average variable cost and marginal cost O average variable cost and average fixed costarrow_forwardI figured out the fixed variable cost, however I can't understand how to do the bottom part.arrow_forward
- Solve for the missing entries in the above table. Enter whole dollar values for Total and Marginal Cost calculations. Round all average cost calculations to the nearest cent. Enter your answers in the following format: A. $5 B. $18 C. $40 etc. (Note, this is just an example, these are NOT the correct answers.)arrow_forwardQuestion 4 Use the following table for the (i),(ii) and (iii) questions. Quantity Total fixed cost Total variable cost 0 $800 $0 1 $800 $50 2 $800 $100 3 $800 $150 4 $800 $200 (i) What is the marginal cost of the third unit? A: $0 B: $50 C: $150 D: $250 (ii) What is the average total cost at the quantity of 4? A: $100 B: $150 C: $200 D: $250 (iii) From the information in the table above, is the marginal product diminishing? A: Yes, because the total cost is increasing as the quantity increases. B: Yes, because the total variable cost is increasing as the quantity increases. C: No, because the marginal cost is not increasing as quantity increases. D: No, because the total fixed cost is not increasing as quantity increases.arrow_forwardJane's Juice Bar has the following cost schedules: In the following table, complete the marginal cost, average variable cost, and average total cost columns. Quantity Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost (Vats of juice) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 0 30 1 5 35 2 15 45 3 30 60 4 50 80 5 75 105 6 105 135 On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Jane's Juice Bar. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 vat of juice to 2 vats of juice is $5, then you would plot a point at (1.5, 5).) Then use the purple points (diamond symbol) to plot the average-variable cost curve starting at 1 vat of juice, and use the green points…arrow_forward
- Total Cost Marginal Cost (Dollars) Average Variable Cost (Dollars per pair) Fixed Cost Variable Cost Average Total Cost (Dollars per pair) Quantity (Pairs) (Dollars) (Dollars) (Dollars) 120 80 1 200 40 2 240 45 3 285 55 4 340 85 425 115 6 540 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 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…arrow_forwardHow would each of the following affect average total cost, average variable cost, and marginal... Question: How would each of the following affect average total cost, average variable cost, and marginal cost? A. An increase in the cost of the lease of the firm's building. B. A reduction in the price of electricity. C. A reduction in wages. D. A change in the salary of the president of the company.arrow_forwardI was able to fill out the first column, but I'm having trouble with the remaining columns of the table that is attached to this question. If you could please help me understand how to complete these calculations, that would be great! Thanks!arrow_forward
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