Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.5.5PA
Subpart (a):
To determine
Measuring total cost.
Subpart (b):
To determine
Conclusion drawn.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
According to one estimate, the parts for a Segway Human Transporter-which has five gyroscopes, two tilt sensors, dual redundant motors, 10 microprocessors, and
can travel up to 12.5 mph-cost at least $1,500 (Eric A. Taub, "Segway Transporter Slow to Catch On," San Francisco Chronicle, August 11, 2003: E4). Suppose that
Segway's marginal cost is $1700, and the price of a Segway is $5500.
What is the firm's price/marginal cost ratio?
The price to marginal cost ratio is
(round your answer to two decimal places)
What is its Lerner Index?
Its Lerner Index is
(round your answer to two decimal places)
What is the elasticity of demand it believes it faces (assuming that it is trying to maximize its short-run profit)?
The price elasticity of demand is . (round your answer to two decimal places)
étv
20
MacBook Air
DI
F4
F5
F3
&
23
2$
7
8
9
-
3
4
5
{
P
W
E
R
D
F
G
J
K
L
>
C
V
M
command
option
.. .-
B
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?
In 1796, Gottfried Christoph Hartel, 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. Hartel figured that the fixed cost of printing a musical page-the cost of
engraving the plates-was 900 pfennigs. The marginal cost of each additional copy of the page
was 5 pfennigs (Scherer, 2001).
Graph the average total cost, average variable cost, and marginal cost functions.
1.) Using the three-point curved line drawing tool, plot the average cost curve. Let the three
points correspond to quantities of 20, 60, and 180 units of output. Label this curve 'AC.'
2.) Using the line drawing tool, draw the marginal cost curve. Label this curve 'MC.'
3.) Using the line drawing tool, plot the average variable cost curve. Label this curve 'AVC.'
Carefully follow the instructions above, and only draw the required objects.
CH
pfennigs, cost per page
50-
45-
40-
35-
30-
25-
20-
15-
10-
01
5-…
Chapter 11 Solutions
Economics (7th Edition) (What's New in Economics)
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
Knowledge Booster
Similar questions
- Compute the average total cost, average variable cost, and marginal cost of producing 50 and 72 haircuts. Draw the graph of line three curves between 60 and 72 haircuts.arrow_forwardDouglas Fur is a small manufacturer of fake-fur boots in Philadelphia. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the following table. Quantity (Pairs) Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 60 1 155 220 255 300 350 450 10:15arrow_forwardVarious measures of cost Douglas Fur is a small manufacturer of fake-fur boots in San Francisco. The following table shows the company’s total cost of production at various production quantities. Fill in the remaining cells of the following table. Quantity Total Cost Marginal Cost Fixed Cost Variable Cost Average Variable Cost Average Total Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars per pair) (Dollars per pair) 0 120 — — 1 200 2 240 3 285 4 340 5 425 6 540arrow_forward
- In 1997 Fuller and coworkers at Texas A&M University estimated the operating costs of cotton gin plants of various sizes. The operating costs of the next to the smallest plant is shown in the following tall 2000 4000 6000 8000 10000 12000 163,200 230,480 301,500 376,160 454,400 536,400 Here is the annual number of bales produced, and y is the dollar total cost. (Use 4 decimal places in your answer) A Determine the best fitting line using least squares. Also determine the square of the correlation coefficient. The best fitting line is C(x)- 37.3203x+82448.0000 The square of the correlation coefficient is ²-0.998719249 B. The study noted that revenue was $63.25 per bale. At what level of production will this plant break even? The revenue equation is R(x)- 63.25x The profit equation is P(x)- 25.9297x-82448 The production will break even when 3179.6725 bales are produced. C. What are the profits or losses when production is 3000 bales? 4000 bales? (Round to the nearest cent.) When 3000…arrow_forwardDistinguish explicit cost and implicit costarrow_forwardUse the table to answer the question below: Quantity Total Cost 0 10 1 23 2 32 3 40 4 55 Calculate marginal cost for the third unitarrow_forward
- Nimubs, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output during a given day: Workers Output Marginal Product Total Cost Average Total Cost Marginal Cost 0 20 50 90 0 1 2 3 A worker is paid $100 a day, and the company's fixed cost is $200. What is the marginal cost as Nimbus's output increases from 50 brooms to 90 brooms? $3.33 $2.5 $5.56 $100arrow_forwardThe total cost to produce hundred motors bikes is $1000. Calculate the average cost of producing the motorbikes.arrow_forwardConsider the following cost information for a pizzeria: Quantity Total Cost Variable Cost (Dozens of pizzas) (Dollars) (Dollars) 300 350 50 2 390 90 420 120 4 450 150 490 190 540 240 The pizzeria's fixed cost is Complete the third column of the following table by calculating the marginal cost per dozen pizzas using the inrearrow_forward
- The United Kingdom started regulating the size of grocery stores in the early 1990s, and today, the average size of a typical UK grocery store is roughly half the size of a typical U.S. store and two-thirds the size of a typical French store (Haskel and Sadun, 2011). What implications would such a restriction on size have on a store's average costs. Discuss in terms of economics of scale and scope. OA. Grocery store size does not affect the long-run average cost of production if there are economies of scale. B. Grocery store size does not affect the long-run average cost of production if there are diseconomies of scale c. The long-run average cost of production for U.K. grocery stores is lower if there are diseconomics of scale Oo. The long-run average cost of production for U.K. grocery stores is higher if there are diseconomics of scale. OE. The long-run average cost of production for U.K. grocery stores is higher if there are no economies of scale Assume smaller grocery stores…arrow_forwardThe blue line on the following graph shows a firm's daily costs for the first 90 days of the fiscal year. Because the firm is expanding, its costs are constantly rising. 10 9 8 +> 10 20 30 40 50 60 70 80 90 100 TIME (Days) The area of the shaded quadrilateral is The area of the quadrilateral corresponds to the between EXPENSES (Thousands of dollars per day)arrow_forwardUse 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 .... Costarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc