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The President of ACME wants to know why he shouldn't produce at the point when average costs are the lowest. Explain to him why this is not the best production level.

The President of ACME wants to know why he shouldn't produce at the point when average costs are the lowest. Explain to him why this is not the best production level.

Microeconomics
Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter8: Production And Costs
Section8.4: Costs Of Production: Total, Average, Marginal
Problem 1ST
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The President of ACME wants to know why he shouldn't produce at the point when average costs are the lowest. Explain to him why this is not the best production level.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 258833968885883885889549499499858SE: 22 A Hammers Price Fixed Costs 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 B 131 132 133 134 135 136 CH 32.00 2,900 Quantity Fixed Costs Variable Costs Total Costs Revenue Profit 2,900 2,930 2,900 2,957 2,900 2,984 2,900 3,011 2,900 3,038 2,900 3,065 2,900 3,092 2,900 3,119 2,900 3,146 2,900 3,173 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 C 2,900 2,900 2,900 2,900 2.900 2,900 2.900 2.900 2.900 2.900 2,900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2333 30.40 57.37 84.33 111.28 138.23 165.18 192.12 219.07 246.04 273.01 300.00 327.01 354.04 381.11 408.20 435.33 462.49 489.70 516.95 544.25 571.60 599.01 626.48 654.01 681.61 709.28 737.02 764.84 792.74 820.73 848.80 876.97 905.23 933.59 962.05 990.63 1.019.31 1.048.10 1.077.01 1.106.04 1.135.20 1.164.48 1.193.90 1.223.45 D 1.253, 14 1.282.98 1.312.95 in innn E 3,200 3,227 3,254 2,880 2,912 2,944 2,976 3,008 3,040 3,072 3,104 3,136 3,168 3,200 3,232 3,264 3,296 3,328 3,281 3,308 3,335 3,362 3,390 3,417 3,444 3,472 3.499 3.526 3.554 3,582 3.609 415,067 3,637 421,894 3.665 428,786 3.693 435.743 3.721 442,767 3.749 449,856 3,777 457.013 3,805 464.238 3.834 471.532 3,862 3.891 478.894 486.329 3.919 493.833 3.948 501,409 3.977 509.057 4.006 516.779 4.035 524.576 540.395 548,419 4.064 532.447 4.094 4 123 4.153 556.521 4.183 564.702 4.213 572.961 einen FALA 3,360 3,392 3,424 3.456 3,488 3,520 3,552 3,584 3.616 3.648 F 5 AC (50) 200 32.56 #VALUE! (45) 32.49857143 (40) 32.43836957 (35) 32.37935484 (30) 32.32159574 (25) 32.26505263 (20) 32.20958333 (15) 32.15536082 (10) 32.10244898 (5) 32.05060606 10 15 20 25 30 34 39 44 48 53 58 62 66 411.458 418,257 425.121 432,051 439,046 446,107 453.236 460 433 467,698 475,032 482.438 489.914 497.461 505 080 512.773 520.541 528.382 536,301 544 295 552 368 560 519 568 748 AN TONG HG mi gian giao G PLE 32 31.95059406 31.90235294 31.85543689 H MR on Ann- 31.65 31.65 31.66 31.66 31.66 31.67 31.67 31.67 31.68 31.68 31.68 31.69 31.69 31.69 31.70 31.70 31.70 31.70 31.71 31.71 31.71 31.71 31.72 31.72 31.72 31.80961538 31.76504762 31.72160377 31.67943925 31.63842593 31.59862385 31.56 31.52261261 31.48642857 31.45141593 31.41763158 31.38504348 31.35362069 3.578.17 31.3234188 3.605.93 31.29440678 3.633.78 31.26663866 3.661.71 31.24 31.2146281 31.19040984 31.16739837 31.14556452 31. 12504 31.10563492 31.08740157 3.689.72 3,717.82 3,746.01 3.774.29 3 802.67 3.831.15 3.859.75 3.888.45 31.07039063 3.917.26 31.05457364 3.946.18 31.04 3.975.22 31.02656489 4.004.40 31.01439394 4.033.69 31 00338346 4.063.12 30 99358209 30.98503704 30.97757353 4.092.68 4.122.38 4.152.22 MC 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 28 28 28 28 28 28 28 28 28 28 28 28 29 29 29 2222 29 29 29 29 29 30 30 30 30 30
Transcribed Image Text:1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 258833968885883885889549499499858SE: 22 A Hammers Price Fixed Costs 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 B 131 132 133 134 135 136 CH 32.00 2,900 Quantity Fixed Costs Variable Costs Total Costs Revenue Profit 2,900 2,930 2,900 2,957 2,900 2,984 2,900 3,011 2,900 3,038 2,900 3,065 2,900 3,092 2,900 3,119 2,900 3,146 2,900 3,173 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 2,900 C 2,900 2,900 2,900 2,900 2.900 2,900 2.900 2.900 2.900 2.900 2,900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2.900 2333 30.40 57.37 84.33 111.28 138.23 165.18 192.12 219.07 246.04 273.01 300.00 327.01 354.04 381.11 408.20 435.33 462.49 489.70 516.95 544.25 571.60 599.01 626.48 654.01 681.61 709.28 737.02 764.84 792.74 820.73 848.80 876.97 905.23 933.59 962.05 990.63 1.019.31 1.048.10 1.077.01 1.106.04 1.135.20 1.164.48 1.193.90 1.223.45 D 1.253, 14 1.282.98 1.312.95 in innn E 3,200 3,227 3,254 2,880 2,912 2,944 2,976 3,008 3,040 3,072 3,104 3,136 3,168 3,200 3,232 3,264 3,296 3,328 3,281 3,308 3,335 3,362 3,390 3,417 3,444 3,472 3.499 3.526 3.554 3,582 3.609 415,067 3,637 421,894 3.665 428,786 3.693 435.743 3.721 442,767 3.749 449,856 3,777 457.013 3,805 464.238 3.834 471.532 3,862 3.891 478.894 486.329 3.919 493.833 3.948 501,409 3.977 509.057 4.006 516.779 4.035 524.576 540.395 548,419 4.064 532.447 4.094 4 123 4.153 556.521 4.183 564.702 4.213 572.961 einen FALA 3,360 3,392 3,424 3.456 3,488 3,520 3,552 3,584 3.616 3.648 F 5 AC (50) 200 32.56 #VALUE! (45) 32.49857143 (40) 32.43836957 (35) 32.37935484 (30) 32.32159574 (25) 32.26505263 (20) 32.20958333 (15) 32.15536082 (10) 32.10244898 (5) 32.05060606 10 15 20 25 30 34 39 44 48 53 58 62 66 411.458 418,257 425.121 432,051 439,046 446,107 453.236 460 433 467,698 475,032 482.438 489.914 497.461 505 080 512.773 520.541 528.382 536,301 544 295 552 368 560 519 568 748 AN TONG HG mi gian giao G PLE 32 31.95059406 31.90235294 31.85543689 H MR on Ann- 31.65 31.65 31.66 31.66 31.66 31.67 31.67 31.67 31.68 31.68 31.68 31.69 31.69 31.69 31.70 31.70 31.70 31.70 31.71 31.71 31.71 31.71 31.72 31.72 31.72 31.80961538 31.76504762 31.72160377 31.67943925 31.63842593 31.59862385 31.56 31.52261261 31.48642857 31.45141593 31.41763158 31.38504348 31.35362069 3.578.17 31.3234188 3.605.93 31.29440678 3.633.78 31.26663866 3.661.71 31.24 31.2146281 31.19040984 31.16739837 31.14556452 31. 12504 31.10563492 31.08740157 3.689.72 3,717.82 3,746.01 3.774.29 3 802.67 3.831.15 3.859.75 3.888.45 31.07039063 3.917.26 31.05457364 3.946.18 31.04 3.975.22 31.02656489 4.004.40 31.01439394 4.033.69 31 00338346 4.063.12 30 99358209 30.98503704 30.97757353 4.092.68 4.122.38 4.152.22 MC 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 27 28 28 28 28 28 28 28 28 28 28 28 28 29 29 29 2222 29 29 29 29 29 30 30 30 30 30
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