The following figures are drawn incorrectly. Carefully explain the problem with each and what the correct graphs should look like.
Homework Answers
For all above diagrams problems are as follows :
Diagram A) : MC curve always cuts AC or ATC curve at it's minimum which is not the case in the diagram given.
Diagram B) : ATC is always higher than AVC because ATC is the sum of AVC and AFC and hence AVC can never cut ATC due to presence of AFC between ATC and AVC
Diagram C) : TC is the sum total of TFC and TVC. Both TC and TVC curves are inverted "S" shaped. This diagram is incorrect because there is not equal vertical distance between TC and TVC which should be there because of presence of TFC which is always a horizontal line ( as it never changes)
Diagram D) : MC curve is a "U" shaped curve that always cuts ATC at it's minimum however in the diagram MC curve is not a "U" shaped curve and hence wrong.
Also, Please find attached correct diagrams for each of above
mentioned cases.
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The following figures are drawn incorrectly. Carefully explain
the problem with each and what the correct...
The following figures are drawn incorrectly. Carefully explain the problem with each and what the correct...
The following figures are drawn incorrectly. Carefully explain
the problem with each and what the correct graphs should look
like.
A) B) C) D) TC TVC MC ATC ATC MC
graph the short-run average cost curves. explain how you got each. (total revenue, Marg rev, MPL,...
graph the short-run average cost curves.
explain how you got each. (total revenue, Marg rev, MPL, TFC,
TVC, TC, AFC, AVC, ATC)
bakers (L) cakes (0) Total Revenue Marg Rev MPL TFC TVC T C AFC AVC ATC MC P(cake) Fixed Fixed cost wage $6 each capital $200 $50 per baker 20 38 56 73 104 133 158 191 219 250 277 296
Part B Short Answer questions (14 points) Q.1 Consider the following graph which shows the cost...
Part B Short Answer questions (14 points) Q.1 Consider the following graph which shows the cost curves of a firm. MC YO NGS ATC AVC Q, QQ, Q QQ (a) is the firm operating in short run or long run? Explain () Is the gap between ATC and AVC increasing or decreasing over quantity? Explain. (c) Suppose wages increase, does AFC increase or not? Explain. (Suppose rental payment increases, does MC increase or not? Explain. ) On a separate graph,...
1. Consider the following hypothetical example Output Price P Total Fixed Cost TFC Total Cost TC...
1. Consider the following hypothetical example Output Price P Total Fixed Cost TFC Total Cost TC Total Variable Cost TVC Average Total Cost ATC Marginal Cost MC 0 100 100 90 1 2 130 158 80 3 183 70 60 4 5 6 7 50 40 30 208 253 308 368 8 20 468 A. Complete the missing figures B. Plot ATC C. Plot AVC D. Plot MC
Q3. You are given the following short-run information for an individual firm. Labor (L) is the on...
Q3. You are given the following short-run information for an individual firm. Labor (L) is the only variable input. The price of labor is S200/week. Total Fixed costs are S1000/week. a. Complete the rest of the table. b. What patterm can you see from the column of marginal product of labor? How might you explain it? c. Draw the MPL and MC curves respectively. Describe the relationship between the MPL and MC Total Labor product QMPL TVC TC ATC MC...
Problem #3, questions A, B, C ,, mluitale the Pange of output levels over which the...
Problem #3, questions A, B, C
,, mluitale the Pange of output levels over which the company will experience economies of scale. d. At which output level is the minimum efticient scale achieved? PROBLEM #3 A company produces a product that it sells in a perfectly reviews its product total fixed and total variable costs (TFC and TVC) in the short run. Find the total cost (TC), marginal cost (MC), and average total cost (ATC) for the company at each...
1. When ONLY Total Costs (TC) are known, explain how to calculate each of the following:...
1. When ONLY Total Costs (TC) are known, explain how to calculate each of the following: a. Fixed Costs (FC) b. Variable Costs (VC) c. Average Variable Costs (AVC) d. Average Total Costs (ATC) e. Average Fixed Costs (AFC) f. Marginal Costs (MC)
PRINT LAST NAME, VIRST NAME A firm's ability to earn large profit is constrained by: Costs...
PRINT LAST NAME, VIRST NAME A firm's ability to earn large profit is constrained by: Costs that must be paid in the short run even when no output is produced are called: NAME THE COSTS OF PRODUCTION SECTION 1 b. C. d. the technology or production techniques available the prices of inputs used by the firm the market price of the good or service sold by the firm. All of the above b. c. d. total costs (TC). total fixed...
10. Linda wants to open a T-shirt stand for Homecoming week. The school will license her...
10. Linda wants to open a T-shirt stand for Homecoming week. The school will license her a booth for $100. Each T-shirt from the store will cost her $4. Linda's average cost function will be: A) $100+ $4X B) $100/X + $4 C) $104/X D) $100/X+S4/X 11. Which of the following formulas is NOT correct? a. MC = TC/Q b. TVC = AVC * Q c. TC=(AFC + AVC)*Q d. AFC = TFC/Q e. ATC = AVC + (TFC/Q) 12....
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100,...
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100, irrespective of how many boats are produced. Total variable costs (TVC) will increase as output increases. Output Total variable cost(£) 50 2 80 100 - 4 Total fixed cost (£) 100 100 100 100 100 100 100 100 Total cost(£) 150 180 200 210 250 320 450 740 110 150 220 350 640 5 a. Plot the Total Cost (TC), Total Variable Cost (TVC),...
The following figures are drawn incorrectly. Carefully explain
the problem with each and what the correct graphs should look
like.
A) B) C) D) TC TVC MC ATC ATC MC
graph the short-run average cost curves.
explain how you got each. (total revenue, Marg rev, MPL, TFC,
TVC, TC, AFC, AVC, ATC)
bakers (L) cakes (0) Total Revenue Marg Rev MPL TFC TVC T C AFC AVC ATC MC P(cake) Fixed Fixed cost wage $6 each capital $200 $50 per baker 20 38 56 73 104 133 158 191 219 250 277 296
Part B Short Answer questions (14 points) Q.1 Consider the following graph which shows the cost curves of a firm. MC YO NGS ATC AVC Q, QQ, Q QQ (a) is the firm operating in short run or long run? Explain () Is the gap between ATC and AVC increasing or decreasing over quantity? Explain. (c) Suppose wages increase, does AFC increase or not? Explain. (Suppose rental payment increases, does MC increase or not? Explain. ) On a separate graph,...
1. Consider the following hypothetical example Output Price P Total Fixed Cost TFC Total Cost TC Total Variable Cost TVC Average Total Cost ATC Marginal Cost MC 0 100 100 90 1 2 130 158 80 3 183 70 60 4 5 6 7 50 40 30 208 253 308 368 8 20 468 A. Complete the missing figures B. Plot ATC C. Plot AVC D. Plot MC
Q3. You are given the following short-run information for an individual firm. Labor (L) is the only variable input. The price of labor is S200/week. Total Fixed costs are S1000/week. a. Complete the rest of the table. b. What patterm can you see from the column of marginal product of labor? How might you explain it? c. Draw the MPL and MC curves respectively. Describe the relationship between the MPL and MC Total Labor product QMPL TVC TC ATC MC...
Problem #3, questions A, B, C
,, mluitale the Pange of output levels over which the company will experience economies of scale. d. At which output level is the minimum efticient scale achieved? PROBLEM #3 A company produces a product that it sells in a perfectly reviews its product total fixed and total variable costs (TFC and TVC) in the short run. Find the total cost (TC), marginal cost (MC), and average total cost (ATC) for the company at each...
PRINT LAST NAME, VIRST NAME A firm's ability to earn large profit is constrained by: Costs that must be paid in the short run even when no output is produced are called: NAME THE COSTS OF PRODUCTION SECTION 1 b. C. d. the technology or production techniques available the prices of inputs used by the firm the market price of the good or service sold by the firm. All of the above b. c. d. total costs (TC). total fixed...
10. Linda wants to open a T-shirt stand for Homecoming week. The school will license her a booth for $100. Each T-shirt from the store will cost her $4. Linda's average cost function will be: A) $100+ $4X B) $100/X + $4 C) $104/X D) $100/X+S4/X 11. Which of the following formulas is NOT correct? a. MC = TC/Q b. TVC = AVC * Q c. TC=(AFC + AVC)*Q d. AFC = TFC/Q e. ATC = AVC + (TFC/Q) 12....
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100, irrespective of how many boats are produced. Total variable costs (TVC) will increase as output increases. Output Total variable cost(£) 50 2 80 100 - 4 Total fixed cost (£) 100 100 100 100 100 100 100 100 Total cost(£) 150 180 200 210 250 320 450 740 110 150 220 350 640 5 a. Plot the Total Cost (TC), Total Variable Cost (TVC),...
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