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?
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- 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?
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- 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. Why?Suppose Honda's total cost of producing 4cars is $225000and its total cost of producing 5cars is $250000 .what is the average total cost of producing 5cars? What is the marginal cost of the fifth car? Draw the marginal cost curve and the average cost curve for a typical firm and explain why these curves cross where they do.In 1796, Gottfried Christoph Härtel, a German music publisher, calculated the cost of printing music using an engraved plate technology and used these estimated cost functions to make production decisions. Härtel figured that the fixed cost of printing a musical page—the cost of engraving the plates—was 900 pfennings. The marginal cost of each additional copy of the page is 5 pfennings (Scherer 2001). a. Graph the total cost, average total cost, average variable cost, and marginal cost functions. b. Is there a cost advantage to having only one music publisher print a given composition? Why? c. Härtel used his data to do the following type of analysis. Suppose he expects to sell exactly 300 copies of a composition at 15 pfennings per page of the composition. What is the greatest amount the publisher is willing to pay the composer per page of the composition?
- The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00 a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is (Click to select) falling rising at a minimum and the marginal cost of cheeseburger production is (Click to select) falling rising at a minimum . b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is (Click to select) falling rising at a minimum and the average total cost of cheeseburger production is (Click to select) falling rising at a minimum .Describe several ways a firm could lower their costs.What is the average cost for the firm from the table below
- A price-taking firm makes air conditioners. The market price of one of its new air conditioners is $130. The firm's total cost information is given in the table below: Instructions: Calculate marginal cost, and enter your responses as whole numbers. Air conditioners per day Total cost Marginal cost ($ per day) ($ per day) 1 100 100 2 150 3 220 4 310 5 405 6 510 7 650 8 800 How many air conditioners should the firm produce per day if its goal is to maximize its profit? air conditioners per day.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)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 .... Cost
- A firm has a fixed production cost of $4000. For the first 100 units of production, the firm has a marginal cost of $50 per unit produced. Producing more than 100 units has a marginal cost of $70 per unit produced. The firm cannot produce more than 150 units. How much does it cost to produce at q=0? at q=50? at q=100? at q=125? at q=150? Graph the firm’s marginal cost functionWhich of the costs discussed in the chapter is the most important when a firm is deciding how much to produce? Costs that are spent to improve the image of the firm. A firm will choose to increase output if it spends a large amount on advertising and brand image. Fixed costs because these costs are spent and cannot be changed in the time period under consideration. If fixed costs are higher, the firm will choose to produce more output. Variable costs because these costs change as output changes. If the firm wants to maximize profits, it will choose to produce a quantity where variable costs are minimized. Marginal cost because this cost shows the additional cost associated with producing one more unit of output. Firms will use this information to decide to produce more or less output.Fixed costs can be defined as costs that
