Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 8, Problem 17QP
To determine
Explain if tax rate increases what happens to cost
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Explain how a decrease in input prices or an increase in efficiency would affect costs.
People often believe that large firms in an industry have cost advantages over small firms in the same industry. For example, they might think a big oil company has a cost advantage over a small oil company. For this to be true, what condition must exist? Explain your answer.
We expect the marginal cost to increase as this firm produces more computers. But when the firm shifts from producing 1 to 2 computers, marginal cost falls. What might explain this?
Chapter 8 Solutions
Microeconomics
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - Prob. 3STCh. 8.2 - Prob. 4STCh. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.4 - Prob. 1STCh. 8.4 - Prob. 2STCh. 8.4 - Prob. 3ST
Ch. 8.4 - Prob. 4STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8.5 - Prob. 3STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QPCh. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNGCh. 8 - Prob. 7WNGCh. 8 - Prob. 8WNGCh. 8 - Prob. 9WNG
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- At what level of output is average cost a minimum? What is the average cost (AC) at that output? What is the Marginal Cost (MC) at that output?arrow_forwardUse the table below to answer the following question. Units Total Fixed Cost Total Variable of Output (dollars) Cost (dollars) 1 150 25 2 150 48 3 150 70 150 100 What is the marginal cost (MC) of producing the fourth unit of output?arrow_forwardThe manager of a T-shirt stand found that the cost to produce 10 T-shirts is $105.68, while the cost to produce 40 T-shirts is $402.98. Assume the cost C(x) is a linear function of x, the number of T-shirts produced. Calculate the marginal cost of a T-shirt, that is, the change in cost of producing one additional T-shirt. (Round to 2 decimal places)arrow_forward
- Use the information in the graph to the right to find the values for the following at an output level of 45. 100- The marginal cost is $ 18 . (Round your response to the nearest dollar.) MC The total cost is $ (Round your response to the nearest dollar.) АТС AVC 43 30 18 45 Quantity of output .... Costarrow_forwardThe marginal cost of producing the third unit of output isarrow_forwardThere is a firm making custom stuffed animals. The demand function for custom stuffed animals is: P = 1000 - 20Q The cost depends on how much of each of their inputs they use. It takes 3 inputs to make a stuffed animal: cotton, oil, and chorizo. The amount required, input prices, and restrictions are below: It takes 1 pound of cotton to make a stuffed animal. Cotton costs $20 per pound. They can buy up to 23 pounds of cotton. It takes 2 barrels of oil to make a stuffed animal. Oil costs $10 per barrel. They can buy up to 44 barrels of oil. It takes 3 chorizo burritos to make a stuffed animal. Burritos cost $5 per burrito. They can buy up to 100 burritos. Set this up in Solver to help them maximize profit by choosing the best quantity of stuffed animals to produce, subject to the constraints of the maximum amount of cotton/oil/burritos they can buy. In the space below, tell the profit that the firm will earn when they maximize its profit. PLEASE SHOW EXCEL WALKTHROUGH USING SOLVER.…arrow_forward
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