Assume the following about a manufacturing plant: • Typical monthly output = 100 ● Typical monthly fixed costs = 30 Typical monthly variable costs = 40 • The manufacturing plant is closed for the entire month of April 2020 due to COVID-19 • April 2020 output = 0 What should the fixed costs for April 2020 equal? a. 0 Ob. 70 OC. 40 d. 30

computer system. The last run of the production cost schedule resulted in the incomplete listing shown below (listed as question numbers). From your knowledge of cost theory, solve for the values in the table to the corresponding questions below. During the last few days the Superior Company has been running into problems with its ATC AFC - MC TC TFC TVC 75 75 A 75 100 75 В 1 75 37.5 15 TC total costs, TFC = total fixed costs, TVC = total variable costs, ATC = average total costs, %3D %3D AFC = average fixed costs, AVC = average variable costs, MC = marginal costs What is the correct numerical value for C in the table? 100 37.5 O 57.5 O 20

Answer each of the following as true or false and briefly explain your answer. 9 39 8 1a) If ec> 1, increasing returns to scale and decreasing average costs are indicated 1b) 7 17 ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ Average cost exceeds marginal cost at the minimum efficient scale of plant. 0 0 1c) DA When total fixed cost and price are held constant, a reduction in average variable cost will typically cause a reduction in the breakeven activity level. 10X00X0 0,0 0,0 0 When long-run average cost is decreasing, it can pay to operate smaller plants at their peak efficiency rather than larger plants with some excess capacity.

TNT Construction wants to sell dynamite for $50 a bundle. Its variable costs for each bundle are $15. To break-even, TNT Construction needs to sell 500 bundles of dynamite. Calculate TNT Construction's fixed costs. Fixed Costs = __________________.

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1 Question 1 Derive the equation for and plot AFC(q), AVC(q), AC(q), and MC(q) for the following cost func- tions. 1. C(q) = 10 + 10q 2. C(q) = 10 + 10q + 2q² 3. C(q) = 800 +0.55q2.67

The table below contains average cost data for four different-sized plants—1, 2, 3, and 4—which are the only four sizes possible. Output 110 Plant 1 $135 125 160 210 135 260 150 310 180 360 210 410 245 Plant 2 $155 135 120 140 160 180 205 Plant 3 $180 160 135 115 140 165 195 Plant 4 $200 180 150 140 110 150 180 a. What is the economic capacity output for each of the four plants? Plant 1: Plant 2: Plant 3: Plant 4: b. In what plant and at what output is minimum efficient scale achieved? Output of in (Click to select) ✓ c. Which plant is the right size to produce an output of 210? (Click to select) d. Which plant is the right size to produce an output of 110? ✓ (Click to select) Plant 1 Plant 2 Plant 3 Plant 4