See the table below. At a long-run chosen output level of 500, which firm size (amount of capital) would the firm want to use? Average cost ($) of output with different firm sizes Output Firm size Firm size Firm size (Q) K=1 K=2 K=3 100 226 260 400 200 195 212 350 300 233 200 311 400 268 230 277 500 311 263 239 600 350 294 255 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a K=1 b K=2 C K=3

See the table below. At a long-run chosen output level of 500, which firm size (amount of capital) would the firm want to use? Average cost ($) of output with different firm sizes Output Firm size Firm size Firm size (Q) K=1 K=2 K=3 100 226 260 400 200 195 212 350 300 233 200 311 400 268 230 277 500 311 263 239 600 350 294 255 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a K=1 b K=2 C K=3

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 19PAE

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2. With reference to Example 9.5.1, let R(Q) = 80Q and C(Q) = Q2 + 10Q + 900. The firm can produce at most 50 units. (a) Draw the graphs of R and C in the same coordinate system. (b) Answer the following questions both graphically and by computation: (i) How many units must be produced for the firm to make a profit? (ii) How many units must be produced for the firm to maximize profits?
Graphically show the relationship between the total fixed cost, the total variable cost, and the total cost. Draw a total cost curve and total revenue curve so that at some outputs that the firm takes losses, outputs where the firm makes unnecessary profits, and where the firm makes only necessary profits. Then, pick a point where the firm is taking losses and show on the graph, the firm’s total losses. Do the same for a point (an output level) where the firm may be making unnecessary profits.
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?
Let us assume you are a consultant of a firm. You realize that due to costs structures changes, the price of the firm is now below the average total cost, but this price is greater than the average varible cost. Your partner in the consulting business suggests you that to reduce output and reduce the price as well. Do you agree with this statement? Explain why you do or do not. Only typing answer Please explain step by step
Suppose your dad owns a voodworking shop where he makes handmade benches. The following graph shows the marginal cost (MC) and average variable cost (AVC) for your dad's business. 100 90 80 MC 70 60 AVC 50 40 30 20 10 10 20 30 40 50 60 70 80 90 100 OUTPUT (Benohes per month) For each of the prices in the following table, use the graph to determine the number of benches your dad would produce in order to maximize his profit. Also, for each of the prices, indicate whether the firm will produce or shut down (or be indifferent between the two) in the short run. Price Output (Dollars per bench) (Benchs per month) Produce or Shut Down? 32 36 42 55 66 76 COST (D olars per bench)
Table: Cakes Table: Cakes Number of Fixed Costs Average Varlable Cost mixers $1,000 1,500 2 2,500 Use Table: Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases 1, 2, or 3 mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases l mixer and bakes 100 cakes per day, what is her average fixed cost? O S15 $10,000 S1,000 O s10 4 googlechrome i.dmg
See Hint Suppose you are the owner of a firm producing jelly beans. Your production costs are shown in the table. Jelly Bean Production Вохes Average cost per box 100 $0.95 101 $0.96 102 $0.97 $0.98 103 Initially, you produce 100 boxes of jelly beans per time period. Thena new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it? Choose one: O. A Yes, because $1.75 is greater than average total cost, O B. No, because $1.75 is less than average total cost. O C. Yes, because $1.75 is greater than the marginal cost. O D. No, because $1.75 is less than the marginal cost. 9 E. We can't say because we don't know average variable cost.
“Only large firms tend to enjoy lower costs due to scale of production. Do you think large firms can compete better than smaller firms and small firms will always be at the losing end because of this?” By using concepts such as economies of scale, explain whether you agree with the statement using specific examples based on an industry of your choice.
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 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.) Average Total Cost (Dollars per bike) Number of Factories O = 100 Q = 200 Q = 300 Q = 400 Q = 500 O = 600 1 520 400 320 400 560 800 660 480 320 320 480 660 800 560 400 320 400 520 Suppose Ike's Bikes is currently producing 500 bikes per month in its only factory. Its short-run average total cost is $ per bike. Suppose Ike's Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using On the following graph, plot the three short-run average total cost curves (SRATC) for Ike's Bikes from the previous…
1. You and your friend Casey N. have just stared a new firm manufacturing electric longboards and are now confronted by your company's long-run options for production. You need to build a production facility and you need to choose between two locations: Ohio or Mississippi. = a. Given the available technology, your firm's production function will be q 2Lª K¹, regardless of where the production facility is located. Find an expression for your firm's MRTS. Explain what the MRTS means in as plain language as possible. b. Use whatever method you prefer to find expressions for the cost minimizing levels of L* and K*. Use your results to write out the firm's long-run cost function [C(w, r,q)]. 2 c. Suppose α = 11/1, b = 1/1/2 , b = regardless of where you locate the plant. If the firm locates in Ohio, the firm will have to pay a wage, w = $64, and a cost of capital of r = $100. If it locates the plant in Mississippi it would have to pay lower wages, w = $36, but the cost of capital would be…
A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright?
The Trouser Company has fixed costs of 2,000 per week. In addition, we have some information about its marginal costs (MC) and total variable costs (TVC) Output 0 30 60 90 100 120 150 MC 140 59 32 59 80 140 275 TVC 0 2850 4080 5310 6000 8160 14,250 For each of the output levels in the table, calculate the Trouser Company’ average variable costs (AVC) and average (total) cost (AC)