Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 11, Problem 11.2.9PA
To determine
Costs in the airline industry.
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Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs?
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Chapter 11 Solutions
Microeconomics (7th Edition)
Ch. 11.A - Prob. 1RQCh. 11.A - Prob. 2RQCh. 11.A - Prob. 3RQCh. 11.A - Prob. 4PACh. 11.A - Prob. 5PACh. 11.A - Prob. 6PACh. 11.A - Prob. 7PACh. 11.A - Prob. 8PACh. 11.A - Prob. 9PACh. 11.A - Prob. 10PA
Ch. 11.A - Prob. 11PACh. 11.A - Prob. 12PACh. 11.A - Prob. 13PACh. 11.A - Prob. 14PACh. 11.A - Prob. 15PACh. 11 - Prob. 11.1.1RQCh. 11 - Prob. 11.1.2RQCh. 11 - Prob. 11.1.3PACh. 11 - Prob. 11.1.4PACh. 11 - Prob. 11.1.5PACh. 11 - Prob. 11.2.1RQCh. 11 - Prob. 11.2.2RQCh. 11 - Prob. 11.2.3RQCh. 11 - Prob. 11.2.4RQCh. 11 - Prob. 11.2.5PACh. 11 - Prob. 11.2.6PACh. 11 - Prob. 11.2.7PACh. 11 - Prob. 11.2.8PACh. 11 - Prob. 11.2.9PACh. 11 - Prob. 11.2.10PACh. 11 - Prob. 11.2.11PACh. 11 - Prob. 11.2.12PACh. 11 - Prob. 11.3.1RQCh. 11 - Prob. 11.3.2RQCh. 11 - Prob. 11.3.3PACh. 11 - Prob. 11.3.4PACh. 11 - Prob. 11.3.5PACh. 11 - Prob. 11.3.6PACh. 11 - Prob. 11.3.7PACh. 11 - Prob. 11.3.8PACh. 11 - Prob. 11.3.9PACh. 11 - Prob. 11.4.1RQCh. 11 - Prob. 11.4.2RQCh. 11 - Prob. 11.4.3RQCh. 11 - Prob. 11.4.4PACh. 11 - Prob. 11.4.5PACh. 11 - Prob. 11.4.6PACh. 11 - Prob. 11.4.7PACh. 11 - Prob. 11.4.8PACh. 11 - Prob. 11.4.9PACh. 11 - Prob. 11.4.10PACh. 11 - Prob. 11.5.1RQCh. 11 - Prob. 11.5.2RQCh. 11 - Prob. 11.5.3PACh. 11 - Prob. 11.5.4PACh. 11 - Prob. 11.5.5PACh. 11 - Prob. 11.5.6PACh. 11 - Prob. 11.5.7PACh. 11 - Prob. 11.5.8PACh. 11 - Prob. 11.5.9PACh. 11 - Prob. 11.6.1RQCh. 11 - Prob. 11.6.2RQCh. 11 - Prob. 11.6.3RQCh. 11 - Prob. 11.6.4RQCh. 11 - Prob. 11.6.5RQCh. 11 - Prob. 11.6.6PACh. 11 - Prob. 11.6.7PACh. 11 - Prob. 11.6.8PACh. 11 - Prob. 11.6.9PACh. 11 - Prob. 11.6.10PACh. 11 - Prob. 11.6.11PACh. 11 - Prob. 11.6.12PACh. 11 - Prob. 11.6.13PACh. 11 - Prob. 11.1CTECh. 11 - Prob. 11.2CTECh. 11 - Prob. 11.3CTECh. 11 - Prob. 11.4CTE
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- Kelly is a clerk and she earns $80,000 per annum. She thinks her salary is too low and decides to start her own cake shop using her savings of $100,000, which earns an interest at 5% per annum. After one year, she earns an accounting profit of $80,000. What is Kelly’s economic profit? Show your calculations. Is Kelly better off running her own shop? Briefly explain.arrow_forwardBriefly write the behaviour of Average fixed cost when output increasearrow_forwardBriefly explain what is meant by the term "variable costs" and provide three examples of same.arrow_forward
- Your uncle is thinking about to open a fish & chips restaurant. He estimated that it would cost $300,000 per year to rent the location, $45,000 to buy the stock and $60,000 to purchase equipment. In addition, he would have to quit his $85,000 per year job as an accountant. How much is his explicit cost, implicit cost, and briefly explain the difference between Accounting profit and Economic profit with examples?arrow_forward-Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability. -Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? -Briefly explain what is meant by the term "variable costs" and provide three examples of same. -Briefly explain how the total revenue for a profit-seeking firm is determined.arrow_forwardSuppose 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)arrow_forward
- I want a way to solve this question (Explanation of the answer) Find the following costs from the table given below. Output Total Cost TFC TVC AC AVC AFC MC 0 500 1 800 2 1100 3 1200 4 1400 5 1500arrow_forwardHw#4.pdf Page 2 of 3 Search 4. Bob produces flower pots for sale, which he designs and manufactures using 3-D printing technology. Bob rents a building for $30,000 per month and rents machinery for $20,000 a month. Those are his fixed costs. His variable cost per month is given in the accompanying table. Quantity of flower pots 0 VC $0 1,000 5,000 2,000 8,000 3,000 9,000 4,000 14,000 5,000 20,000 6,000 33,000 7,000 49,000 8,000 72,000 9,000 99,000 10,000 150,000 a) Calculate Bob's average variable cost, average total cost, and marginal cost for each quantity of output. b) There is free entry into the industry, and anyone who enters will face the same costs as Bob. Suppose that currently the price of a flower pot is $25. What will Bob's profit be? Is this a long-run equilibrium? If not, what will the price of a flower pot be in the long run?arrow_forwardHelp me pleasearrow_forward
- Consider this statement: “A firm should increaseoutput when it makes a profit.” Do you agree ordisagree? Explain.arrow_forwardIn 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?arrow_forwardWhich of the following graphs shows average fixed cost?arrow_forward
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