Homework Answers
9.1 assuming that the car is not directly used in production, an increase in its insurance cost will have the following impact
Marginal cost curve = no change
Average variable cost curve = no change
average fixed cost curve = will shift rightwards as the fixed costs will go up
average total cost curve = will shift rightwards as the total costs will go up
9.2 assuming that the diesel is directly used in production, i.e., the business of transportation this company seems to be in, a decrease in its cost will have the following impact
Marginal cost curve = will shift leftward as the cost goes down
Average variable cost curve = will shift leftward as the cost goes down
average fixed cost curve = no change
average total cost curve = will shift leftward as the cost goes down
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Question 9 Indicate how each of the following would shift the (a) marginal-cost curve, (b) average...
TOT D. Construct different cost curves Refer to the factors causing a shift of cost curves...
TOT D. Construct different cost curves Refer to the factors causing a shift of cost curves on P.26 of lecture notes (topic 6), you are required to draw the average total cost curves (ATC), average variable cost curves (AVC), and marginal cost curves (MC) of a firm to indicate the possible impacts of the given changes Given that there is an increase in rent. (Draft work) Diagram Group discussion Given that there is an increase in wage rate. (Draft work)...
4) (20 pts) The marginal product curve intersects the average product curve at the maximum point...
4) (20 pts) The marginal product curve intersects the average product curve at the maximum point of the AP curve. Conversely, the marginal cost curve intersects the average variable cost curve at the minimum point of the AVC curve. a. Explain why this necessarily has to be the case. Present your answer both in mathematical and intuitive terms. Be as detailed as you possibly can in answering this question. b. Explain why the marginal cost curve above the average variable...
b. Average variable cost, average fixed cost, marginal cost and average cost are necessary for the...
b. Average variable cost, average fixed cost, marginal cost and average cost are necessary for the analysis of the cost structure of the firm. Define each of these terms and show how they are calculated c. Describe the relationship between the marginal product and the total product of a firm
Fill the table with the values of Marginal Cost given that the Average Variable Cost is...
Fill the table with the values of Marginal Cost given that the
Average Variable Cost is at its lowest point.
and in order to maximise economic profit, how should the firm
alter its level of production? (e.g. increase, decrease or remain
unchanged). Briefly explain why.
Use the table below to answer the following 5 questions: Question 20 - Question 24. Output , A Total Cost Average | Total Total Variable Cost Cost Average Variable Cost Total Fixed Cost Average Marginal...
15. When marginal cost is less than average total cost, a. marginal cost must be falling....
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and...
The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and average fixed cost (AFC) curve for Eleanor's Pizza Parlor when the retail price Eleanor pays for pizza sauce, including sales tax, is $15 per gallon. ATC AVC OUTPUT (Pizzas per day) Suppose the sales tax on pizza sauce is removed, so the price of pizza sauce decreases to $14 per gallon. In the following table, indicate how each cost and curve is affected, if...
Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve.
3. Is monopolistic competition efficient? Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with...
When marginal cost of production rises above the average total cost of production, we know that:...
When marginal cost of production rises above the average total cost of production, we know that: A. the firm has economies of scale B. average total cost is decreasing C. marginal cost is negative D. average total cost is increasing Average total cost curves are usually depicted as downward sloping at low levels of output because: A. Average fixed costs are declining B. Opportunity costs decline as output (Q) increases C. Average fixed...
Indicate how you think each of the following would shift demand in the indicated market a....
Indicate how you think each of the following would shift demand in the indicated market a. The incomes of buyers in the market for used Ford Fusions decreases. The demand curve would shift to the left b. Buyers in the market for pizza read a study linking pepperoni consumption to weight gain. The demand curve woud The demand curve would shift to the leftf c. Buyers in the market for gas-powered cars learn of a decrease in the price of...
QUESTION 13 Every point on the long-run average cost curve is O on a short-run marginal...
QUESTION 13 Every point on the long-run average cost curve is O on a short-run marginal cost curve. also a minimum point on a short-run average cost curve. O on a short-run average total cost curve. O on a short-run average variable cost curve. QUESTION 14 If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that O average variable costs are $100. o marginal costs are...
TOT D. Construct different cost curves Refer to the factors causing a shift of cost curves on P.26 of lecture notes (topic 6), you are required to draw the average total cost curves (ATC), average variable cost curves (AVC), and marginal cost curves (MC) of a firm to indicate the possible impacts of the given changes Given that there is an increase in rent. (Draft work) Diagram Group discussion Given that there is an increase in wage rate. (Draft work)...
4) (20 pts) The marginal product curve intersects the average product curve at the maximum point of the AP curve. Conversely, the marginal cost curve intersects the average variable cost curve at the minimum point of the AVC curve. a. Explain why this necessarily has to be the case. Present your answer both in mathematical and intuitive terms. Be as detailed as you possibly can in answering this question. b. Explain why the marginal cost curve above the average variable...
Fill the table with the values of Marginal Cost given that the
Average Variable Cost is at its lowest point.
and in order to maximise economic profit, how should the firm
alter its level of production? (e.g. increase, decrease or remain
unchanged). Briefly explain why.
Use the table below to answer the following 5 questions: Question 20 - Question 24. Output , A Total Cost Average | Total Total Variable Cost Cost Average Variable Cost Total Fixed Cost Average Marginal...
15. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. 16. Which of the following is not a characteristic of a competitive market? a. Buyers and sellers are price takers. b. Each firm sells a virtually identical product. c. Entry is limited d. Each firm chooses an output level that maximizes profits. 17. If a...
The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and average fixed cost (AFC) curve for Eleanor's Pizza Parlor when the retail price Eleanor pays for pizza sauce, including sales tax, is $15 per gallon. ATC AVC OUTPUT (Pizzas per day) Suppose the sales tax on pizza sauce is removed, so the price of pizza sauce decreases to $14 per gallon. In the following table, indicate how each cost and curve is affected, if...
Indicate how you think each of the following would shift demand in the indicated market a. The incomes of buyers in the market for used Ford Fusions decreases. The demand curve would shift to the left b. Buyers in the market for pizza read a study linking pepperoni consumption to weight gain. The demand curve woud The demand curve would shift to the leftf c. Buyers in the market for gas-powered cars learn of a decrease in the price of...
QUESTION 13 Every point on the long-run average cost curve is O on a short-run marginal cost curve. also a minimum point on a short-run average cost curve. O on a short-run average total cost curve. O on a short-run average variable cost curve. QUESTION 14 If total costs are $50,000 when 1000 units are produced, and total costs are $50,100 when 1001 units are produced, we can conclude that O average variable costs are $100. o marginal costs are...
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