1. Economies of scale Vision Source is a cable television provider. In the long run, Vision Source can provide cable television for 20,000 homes each month at a total cost o $700,000, cable television for 30,000 homes at a total cost of $750,000, or cable television for 40,000 homes at a total cost of $800,000. Use the purple points (diamond symbol) on this graph to plot points of the long-run average cost curve at outputs of 20,000, 30,000, and 40,000 homes. 50 Average cost 10 20 30 40 50 HOMES SERVED (Thousands) AVERAGE COST (Dollars per home per month) 20

1. Economies of scale Vision Source is a cable television provider. In the long run, Vision Source can provide cable television for 20,000 homes each month at a total cost o $700,000, cable television for 30,000 homes at a total cost of $750,000, or cable television for 40,000 homes at a total cost of $800,000. Use the purple points (diamond symbol) on this graph to plot points of the long-run average cost curve at outputs of 20,000, 30,000, and 40,000 homes. 50 Average cost 10 20 30 40 50 HOMES SERVED (Thousands) AVERAGE COST (Dollars per home per month) 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Use the information in the following graph to find the values for the following at an output level of 1000: Cost (per unit) $30 20 15 3. b. C. d. Marginal cost Total cost 1000 Variable cost Fixed cost MC ATC AVC Quantity of output
Production Total Product Total Fixed Cost Total variable cost Total Cost Average fixed cost Average variable cost Average Total Cost Marginal Cost 0 0 1 25 2 45 3 60 4 70 5 85 6 105 7 135 8 180 9 240 10 315 Assume that fixed costs are $50, labor is the only variable input and its costs are reflected completely in the costs above. Complete the table Graph AFC, AVC, ATC, and MC Explain how increasing returns and decreasing returns are depicted in your graph If the labor input increased by $10 at every unit of production, what would be the effect on your graphs?
es The following are three short-run average total cost schedules for the only three possible plant sizes, 1, 2, and 3. Find the long-run average cost schedule and show the result in the second table. Size 1 Q 10 20 30 40 50 60 ATC $1.00 90 .85 .88 .93 1.05 Size 2 Q 20 30 40 50 60 70 Long-Run Q 10 90 ATC $.95 .80 .76 .79 .83 .90 Size 3 Q 40 50 60 70 80 90 AC $ ATC $1.00 .87 .84 .80 .95 1.05
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Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 1 74°F Clear 2 3 440 620 800 Q = 200 280 380 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 320 240 320 240 240 Q = 500 480 380 280 Q = 600 800 620 440 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $440 per bike. Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using one factory On the following graph, plot the three SRATC curves for Ike's Bikes from the…
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A firm has the following average total cost curves: Quantity ATC11 ATC22 ATC33 ATC44 1 100 150 50 200 2 80 130 45 170 3 60 110 40 140 4 50 90 45 110 5 55 70 60 90 6 85 60 80 70 7 120 75 100 65 In the long run what is the average total cost when five goods are produced? $
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QUESTION 4 1. Use the table below to Calculate the Specified Values and answer questions: Quantity of meals Total Variable Cost 0 0 10 200 20 300 30 480 40 700 50 1,000 Assume there is a $100 Fixed cost for Kitchen Appliances At what Quantity is Average Total Cost lowest? OA. 10 B. 20 C. 40 OD. 30 W
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