5 Exhibit 6-10 Short-run cost schedule for book publisher's hourly productionTotalTotalOutputVariable Cost0 cases of books234$0100150250450TotalCost$200300350450650In Exhibit 6-10, the marginal cost of increasing production from 2 to 3 cases of books is:O a. lower than the marginal cost of increasing production from 1 to 2 cases of books, so the marginal cost must be greater thanaverage total cost between 2 and 3 cases.O b. lower than the marginal cost of increasing production from 1 to 2 cases of books, so the average total cost must be rising inbetween 2 and 3 cases.Oc higher than the marginal cost of increasing production from 1 to 2 cases of books, so the average total cost must be rising inbetween 2 and 3 cases.O d. higher than the marginal cost of increasing production from 1 to 2 cases of books, so the marginal cost curve must be rising inbetween 2 and 3 cases.

Marginal cost (MC) measures the change in the change in total cost due to a change in quantity. MC =…

Total Output 0 cases of books 1 2 3 4 Total Variable Cost $0 100 150 250 450 Total Cost $200 300 350 450 650 In Exhibit 6-10, the marginal cost of increasing production from 2 to 3 cases of books is: O a. lower than the marginal cost of increasing production from 1 to 2 cases of books, so the marginal cost must average total cost between 2 and 3 cases.

Total Output 0 cases of books 1 2 3 4 Total Variable Cost $0 100 150 250 450 Total Cost $200 300 350 450 650 In Exhibit 6-10, the marginal cost of increasing production from 2 to 3 cases of books is: O a. lower than the marginal cost of increasing production from 1 to 2 cases of books, so the marginal cost must average total cost between 2 and 3 cases.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 6PA

See similar textbooks

Similar questions

How does fixed cost affect marginal cost? Why is this relationship important?
What is a production technology?
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
What is die difference between accounting and economic profit?
Return to Figure 7.7. What is the marginal gain in output from increasing the number of batters from 4 to 5 and from 5 to 6? Does it continue the pattern of diminishing marginal returns? Figure 7.7 How output Affects Total costs
Suppose the cost of machines increases to 55, while the cost of labor stays at 40. How would that affect the total cost of the three methods? Which method should the film choose now?
What are explicit and implicit costs?
What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost, variable costs, and marginal cost?
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?