Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 3P
(a):
To determine
Calculate the actual cost.
(b):
To determine
Marginal cost.
(c):
To determine
Average cost.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Assume that it costs a company approximately
C(x) = 400,000 + 160x + 0.003x²
dollars to manufacture x smartphones in an hour.
(a) Find the marginal cost function.
Use it to estimate how fast the cost is increasing when x = 10,000.
$
per smartphone
Compare this with the exact cost of producing the 10,001st smartphone.
The cost is increasing at a rate of $
(b) Find the average cost function C and the average cost to produce the first 10,000 smartphones.
C(x)
(10,000)
=
=
per smartphone. The exact cost of producing the 10,001st smartphone is $
$
(c) Using your answers to parts (a) and (b), determine whether the average cost is rising or falling at a production level of 10,000 smartphones.
The marginal cost from (a) is ---Select--- than the average cost from (b). This means that the average cost is ---Select---
Thus, there is a difference of $
at a production level of 10,000 smartphones.
Carlota Music Company estimates that the marginal cost of manufacturing its Professional Series guitars is
C ′ (x) = 0.02x + 100
dollars/month when the level of production is x guitars/month. The fixed costs incurred by Carlota are $4000/month. Find the total monthly cost incurred by Carlota in manufacturing x guitars/month.
For the following problem, what would be the objective function that aims at minimizing the total cost considering that X1, X2, X3, and X4 are the
number of units produced and sold of Products 1, 2, 3, and 4, respectively?
Manufacturing time (hr) per unit
Machine Cost per hr ($)
Product 1 Product 2
Product 3
Product 4
Capacity (hr).
10
2
4
2
500
5
3
1
2
380
4
7
1
450
Unit selling
price ($)
75
45
O a. 20X1+30X2+40X3+20X4
O b. None of the answers
OC. 75X1+70X2+55X3+45X4
Od. 63X1+52X2+53X3+34X4
123
دي دا فيا
70
2
55
Chapter 8 Solutions
Contemporary Engineering Economics (6th Edition)
Knowledge Booster
Similar questions
- ATC, AAC, AVC, MC (/uni 270.00 24000 21000 180.00 150.00 120.00 10:00 60.00 30.00 0:00 02 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 Units of Output (0) Unit Cost Curves Refer to the graph above. The curves are not labeled. To help get this question right, you must first label the curves. An output level of 18 is identified with the dark vertical line. The shaded rectangular area (height times width) is the O average sunk cost. O total sunk cost O total avoidable fed cost. O total avoidable cost. O None of the abovearrow_forwardA company is planning to manufacture snowboards. The fixed costs are $125 per day and the total costs are $5,786 per daily output of 19 boards. What is the average costs per board tend to as production increases?arrow_forwardA cost function is given. C(q) = 3600 + 5q-0.02q² + 0.00039³ (a) Find the average cost and marginal cost functions. +5 -0.02q +0.0003q average cost 3600 9 marginal cost 5 -0.04q+0.0009q (b) Use graphs of the functions in part (a) to estimate the production level that minimizes the average cost. (Round your answer to the nearest integer.) 194 ✓ units (c) Use calculus to find the minimum average cost. (Round your answer to two decimal places.) $ 32.41 X (d) Find the minimum value of the marginal cost. (Round your answer to two decimal places.) $ 4.56arrow_forward
- only d,e,f pleasearrow_forward1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C 2.38 (3.33) 0.006153Q (3.08) 0.000005359Q² (3.16) 19.2X₁ (2.96) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X₁ = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: £0.025,70 = 1.99.) Check all that apply. Q2 What type of average cost-output relationship is suggested by these statistical results? ○ Cubic Linear Quadratic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in the…arrow_forwardExtreme Protection, Inc. manufactures helmets for skiing and snowboarding. The fixed costs for one model of helmet are $6600 per month. Materials and labor for each helmet of this model are $55, and the company sells this helmet to dealers for $85 each. (Let x represent the number of helmets sold. Let C, R, and P be measured in dollars.) (a) For this helmet, write the function for monthly total costs C(x). C(x) = (b) Write the function for total revenue R(x). R(x) = ◇ For each additional helmet sold the profit (in dollars) increases by this much, but since it is positive it means that the company is producing too many helmets. For each additional helmet sold the profit (in dollars) increases by this much, but since it is negative it means that the company needs to decrease the number of helmets sold in order to make a profit. ◇ This is the profit (in dollars) when 200 helmets are sold, but since it is negative it means that the company loses money when 200 helmets are sold. (e) Find…arrow_forward
- A heavy equipment manufacturing company has produced its first unit using 3500 hours and $300,000 overhead cost. The next unit, i.e. the second unit took 3300 hours. Overhead cost for this unit was $200,000. Suppose the labor was $20 per hour. Being the production manager, you need to decide what would be the total production costs for additional 10 units after the completion of the second unit. Round the final amount to nearest integer. $1,597,832 C$1,003,183 (DNone of the abovearrow_forward2. Exercise 9.2 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. C 3.41 (3.41) 0.007384Q (2.84) 0.000005359Q2 (3.16) 23.0X1 (3.23) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X₁ = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Holding constant the effects of bank branching (X1), what is the level of total assets that minimizes the average operating expense ratio? $1,557.42 million O $688.93 million $461.81 million $1,377.87 million What is the average operating expense ratio for a savings and loan association with the level of total assets determined in the previous part and 1 branch? 1.18% 0.90% 4.94% 3.44% What is the ratio with 10 branches instead?…arrow_forwardhow to calculate total cost analysisarrow_forward
- A manufacturing company produces solar panels. The variable costs are $20 per unit and fixed costs are $10,875. The price demand relationship for this product is P=-0.25Q+ 250, where P is the unit sales price of the product and Q is the demand of solar panels. Given the following: • Total cost = Fixed cost + Variable cost • Revenue = Demand x Price • Profit = Revenue - Total cost 26. The equation that represent the total cost is: a. ($10,875+$20) Q b. $10,875-$20 Q c. $10,875 × $20 Q d. $10,875+$20 Q 27. The equation that represent the total revenue is: a. $0.25Q²+$250Q b. - $0.25Q²+$250Q c. - $0.25Q²-$250Q d. $0.25Q²-$250Qarrow_forwardplease do c, d, earrow_forward$150 125 100 75 50 Cost per Unit 25 0 5 e 15 25 30 MC ATC AVC Units per day Use the graph above to answer the following question: What is the total cost of producing 15 units? Note: enter answer with only numerical values and round up to the nearest tenth. For example, if you think the answer is "$101.58" then enter the answer "101.6" in the space below.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning