2.9 [Related to the Apply the Concept: "Fixed Costs in the Publishing Industry" O] A FederalReserve publication notes “Airlines have high fixed costs." What are likely to be the most important fixedcosts for an airline? Are airlines likely to have particularly high fixed costs relative to their variable costscompared with, say, an Old Navy clothing store or a Panera Bread restaurant? Briefly explain.

Meaning of Cost: The term "cost" describes the circumstances in which a business incurs different…

Answered: 2.9 [Related to the Apply the Concept:…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 7PA

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Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?
Would you consider an interest payment on a loan to a film an explicit or implicit cost?
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
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?
) Complete the following table of costs for a firm. (Note: enter the figures in the MC column between outputs of 0 and 1, 1 and 2, 2 and 3, etc.) Output TC (£) AC (£) MC (£) 0 1 2 3 4 5 6 7 8 9 10 55 85 110 130 160 210 280 370 480 610 760 – 85 55 43.33 40 42 46.66 52.80 60 67.77 76 30 25 20 30 50 70 90 110 130 150 How much is total fixed cost at: (i) an output of 0? ................................................................................................................. (ii) an output of 6? ................................................................................................................. How much is average fixed cost at: (i) an output of 5? ................................................................................................................. (ii) an output of 10?…
The table below shows the cost of production for Coca-cola 200 ml. please answer the table graph the table with marginal cost, average variable cost, average fixed cost and average total cost explain the relationship of the graph of the arginal cost, average variable cost, average fixed cost and average total cost Output Variable Cost Fixed cost Total Cost Marginal Cost Average Variable Cost Average Fixed Cost Average Total Cost 0 0 9 1 694 9 2 833 9 3 1018 9 4 1157 9
3. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in San Diego. 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 60 — — 1 160 2 220 3 270 4 340 5 450 6 630 On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC…
4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in Dallas. The following table shows the company’s total cost of production at various production quantities. IMG 1 On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should start your MC curve by placing an orange square at (0.5, 95).) Note: Plot your points in the order in which you would like them connected. Line segments will…
Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club’s fixed and variable costs and then make a recommendation for a ticket price. Give the club three examples of each type of cost. Fixed Costs [example 1] [example 2] [example 3] Variable Costs [example 1] [example 2] [example 3] What is your recommendation for ticket pricing? Do you cover just fixed costs or both costs?
Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club’s fixed and variable costs and then make a recommendation for a ticket price. Give the club three examples of each type of cost. Fixed Costs [example 1] [example 2] [example 3] Variable Costs [example 1] [example 2] [example 3] What is your recommendation for ticket pricing? Do you cover just fixed costs or both costs? Schiller, B. R., & Gebhardt, K. (2016). The economy today (14th ed.). Columbus, OH: McGraw-Hill Higher Education.
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?

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