1. Supposed that a firm's fixed cost increase due to a rise in rental payment. What impact will this have on the firm's a) average fixed cost, b) average variable cost, c) average total cost and d) marginal cost? Why? 1 2. Kid Center offers tutorial classes. Fixed costs are estimated at P5, 000 a month, the variable cost per chila is P100 an hour, and the price per hour is set at P150. How many hours of instruction are required to break even? 3. Maria is a seller in a purely competitive market. Which of the assumptions in the theory of perfect competition will convince her that she will only break even in the long run?

1. Supposed that a firm's fixed cost increase due to a rise in rental payment. What impact will this have on the firm's a) average fixed cost, b) average variable cost, c) average total cost and d) marginal cost? Why? 1 2. Kid Center offers tutorial classes. Fixed costs are estimated at P5, 000 a month, the variable cost per chila is P100 an hour, and the price per hour is set at P150. How many hours of instruction are required to break even? 3. Maria is a seller in a purely competitive market. Which of the assumptions in the theory of perfect competition will convince her that she will only break even in the long run?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.2IP

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12 st L8 Get & Transform Data 4 6 7 1 2 Available Product 3 8 9 10 11 12 13 A 14 15 16 17 18 19 20 All :X ✓ fx B Pounds made Workbook Links Queries & Connections 3000 Flour (ounce) 1500 Egg (piece) 4500 Labor (man-hour) Unit Price Variable Cost Demand UCM Adiucted C 3.2 1.5 6 D $12.50 $6.50 960 $6.00 2.6 1.5 5 Data Types $11.00 $5.70 928 $5.30 E 1.5 1 4 <1 $9.00 $3.60 1041 $5.40 F 0 0 0 0 Banana Muffin Choc Muffin Banana Cookies Choc Cookies Milk Bread White Bread 0.7 0.3 0.5 0 2.5 1.5 $6.00 $3.00 $2.20 $1.20 1084 1055 $3.80 $1.80 AV 0 0.8 1 3 G $7.00 $2.80 977 $4.20 Sort & Filter H Advanced 0