Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 14, Problem 1IAPA
To determine
To find:
The store having the lowest total cost and the lowest marginal cost, and the reason for surety of the lowest total cost and lowest marginal cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following graphs shows average fixed cost?
Explain the shapes of the marginal and average cost curves of a firm. Use a diagram to support your answer.
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.
Chapter 14 Solutions
Foundations of Economics (8th Edition)
Knowledge Booster
Similar questions
- How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect the long-run average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?arrow_forwardWe 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?arrow_forwardEach graph below illustrates three short run cost curves for firms, where ATC is Average Total Cost (aka Average Cost), MC is Marginal Cost, and AVC is Average Variable Cost. Based on what you know about the relationships between these curves, which of the following graph is correct? MC ATC ATC AVC AVC B. MC MC ATC AVC ATC AVC D. MC AVC ATC E. D. OAarrow_forward
- The following table shows data for quantity (Q), variable cost (VC), and fixed cost (FC) for a ski company. a) Fill the table for total cost (TC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC). Make sure to show your work for at least one line. Q VC FC TC ATC AVC MC 30 1 10 30 25 30 3 45 30 4 70 30 100 30 6 135 30 b) Now suppose the firm decides to produce a quantity of 5 units (Q=5), and it sells for a price of $25 each. Answer the following: 1. Calculate the company's profits or losses 2. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? 3. At the given quantity and price, is the marginal unit produced adding or subtracting to profits? Should the fırm produce at this level of output?arrow_forward“A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?arrow_forwardWe 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?arrow_forward
- What happens to the average fixed cost, when the output of a firm increases.arrow_forwardNimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus' output during a given day. I have completed the first two rows. Workers Output Marginal Total Average Marginal Product Cost Total Cost Cost $200 1 20 20 $300 $15 $5 2 50 30 $400 $8 $3.33 3 90 40 4 120 30 140 20 150 10 7 155 5arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
- Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage LearningPrinciples of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning