4. If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units o output is $30.23, what will happen to the average cost of production if the 15th unit is produced? 1. Average cost will fall. My question is why will Average cost fall?

4. If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units o output is $30.23, what will happen to the average cost of production if the 15th unit is produced? 1. Average cost will fall. My question is why will Average cost fall?

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 4CQQ

See similar textbooks

Related questions

Q: 9. Firm's Cost Schedule Jane's Juice Bar has the following cost schedules: In the following table,…

A: 1. Marginal cost = Change in costs / Change in quantity 2. Average Variable Cost = Variable…

Q: 3. For the technologies y=min =+x; compute: and a) the total cost and the cost of production of 1…

A: The total cost function is a relationship between total cost and output level and input prices. It…

Q: 13.03 Homework • Answered If the average variable cost of producing 4 jeans at Jerry's factory is…

A: We know that, Total Cost(TC)= Total Fixed Cost(TFC)+Total Variable Cost(TVC),Average Variable…

Q: 2.7 The concept of economies of scale refers to lower per- unit production costs at higher levels of…

A: Adam Smith is considered the father of economics. He was the first individual to notice that as long…

Q: 3. Calculate TC, AFC, AVC, ATC and MC. Fixed Variable Costs Average Average Average Marginal Units…

A: 3) The formulas below would be required for the values in the table. TC= FC+ VC Total cost is the…

Q: 3. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles.…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Figure 1 shows price, marginal cost and gavecege.cost.cUDces for a fioD- Figure 1 Costs MC AC (RM)…

A: Since you have posted muti-subparts questions, as per answering guidelines we will solve the first 3…

Q: Answer the next four questions after completing the cost table below: Quantity TC MC AFC AVC ATC 0 1…

A: The measure that depicts expenses incurred by business for carrying out day to day expenses is known…

Q: 3. The relationship between marginal and average costs Consider the following scenario to understand…

Q: 5. Refer to the information provided in the following figure, If this firm's cost of labor is $10…

A: Total cost is the cost incurred for the production of goods and services. TC = wL + rK

Q: See the cost information in the table below. The marginal cost of the 6th unit is Quantity…

A: The marginal cost of a good refers to the increment in the total cost when an additional unit of a…

Q: . Marginal Cost Suppose the monthly total costfor the manufacture of 19-inch television sets isC(x)=…

A: The total cost shows the market value of inputs used by the firm in the production of goods and…

Q: 3. As marginal cost rises, average variable cost necessarily rises. True False

A: Marginal cost (MC) curve is the incremental cost of production, i.e. the cost incurred when one more…

Q: 5. Jane’s Juice Bar has the following cost schedules: Quantity 0 vats of juice 1 2 3 4 5 6 Variable…

A: In economics, average variable cost is a firm's variable costs divided by the quantity of output…

Q: 5. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles.…

A: Short run average total cost is $720 per bike. In the long run, it would like to produce using three…

Q: 11.)(*) Ollah’s Organic Pet Shop sells about 4,000 bags of free- range dog biscuits every year. The…

A: We are going to use Economic Order Quantity and Total holding & operating cost concept to answer…

Q: 9) A chocolate company makes truffles using labor and capital. The company pays the workers $12 per…

A: The problem of reducing costs is, in mathematics, a problem. In limited optimization. The firm wants…

Q: variable costs (AVC), average total costs (ATC), and marginal costs (MC) to fill in the missing…

A: Fixed cost refers to the cost that stays same at all levels of output. Variable cost is the cost…

Q: 8) EFG Company is using labor and capital to build phones. The last employee produced 90 more phones…

A: The marginal product for a factor of production refers to the addition in output as a result of…

Q: 2. Assume that the marginal cost of production is greater than the average variable cost. Can you…

A: Formula to calculate AVC and MC:- AVC=TVCQMC=TCn-TCn-1 where; TVC= Total Variable CostTC=Total…

Q: Answer the following questions: show working a. What is the firm's fixed cost? b. If the firm…

A: Hey, Thank you for the question. According to our policy we can only answer up to 3 sub parts per…

Q: 8. Why is the Minimum Average Total Cost and Efficient Scale important?

A: Average Total Cost : The average cost or average total cost is per unit cost incurred by the firm in…

Q: Define total cost, average total cost, and marginal cost. How are they related?

A: Production prices ar the expenses incurred by a firm once it manufactures a product or provides a…

Q: 7. Consider the following cost information for a pizzeria: Q (dozens) Variable Cost Total Cost $ 0…

A: The fixed costs are the costs that are incurred even if there is no production. These include the…

Q: 3. As marginal cost rises, average variable cost necessarily rises. * True False

A: Marginal cost (MC) curve is the incremental cost of production, i.e. the cost incurred when one more…

Q: Costs in the short run versus in the long run Ike’s Bikes is a major manufacturer of bicycles.…

A: We can clearly represent the table as follows Here, the left most column represents the number of…

Q: 6) If a firm produces 100 units of output and has an average total cost of $6 then what is their…

A: Average total cost refers to total cost divided by a total unit of output produced. It is the sum of…

Q: D D Question 12 When marginal product is diminishing O average variable cost is falling O fixed cost…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Question 1 Output (Q) Total Fixed Cost (TFC) Total Variable cost (TVC) 0 100…

A: Marginal cost is the the cost incurred when an additional unit of input is hired. Mathematically, it…

Q: 13 When average total cost is at is minimum A erage variable cost a decreasing baverage total cost…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: 22. Suppose an artist put on 5 concerts in Korea last month for an average total cost of $1 million…

A: Average Total Cost(ATC) is the total cost divided the total quantity. ATC=total costtotal quantity…

Q: Total cost Labor (workers)| Output (frijoles) (dollars) 1,000 1,000 3,000 10 3,000 5,000 15 4,000…

Q: 2. A firm produces 200 units and total cost of production is $4000. When they increase output to…

A: The total cost(TC) of the firm refers to the sum of all costs which is incurred in producing a…

Q: 4) What is the total variable cost?

Q: a. Compute the average cost and marginal cost. Units of output Total Cost Average Cost Marginal Cost…

Q: Consider the following cost information for a pizzeria:Quantity Total Cost Variable Cost0 dozen…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: statements is true or false and explain If marginal cost is larger than average cost, average cost…

A: Marginal cost is the additional cost incurred in order to produce an additional unit of output.

Q: QUESTION 1 Table 13-16 Average Average Variable Marginal Fixed Variable Quantity Total Cost Fixed…

A: In economics, average variable cost is a firm's variable costs divided by the quantity of output…

Q: QUESTION 2 A firm is considering changing its plant size. It calculates the amount of output it…

A: Answer: Diseconomies of scale: diseconomies of scale occur when due to an increase in the quantity…

Q: 3. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicycles.…

A: The total cost incurred by a firm operating in a market includes fixed costs and variable costs.…

Q: How does fixed cost affect marginal cost? Why is this relationship important?

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Consider the following cost information for apizzeria:Quantity Total Cost Variable Cost0 dozen…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: (a) Explain intuitively why a firm's average cost curves are U-shaped and why does its average…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 9) What are two examples of fixed costs?

A: Hi, since you have asked for #3, providing answer for the 9th question that comes third. Total…

Q: TC = TVC + TFC TVC = AVC * q TFC = AFC * q TC ATC = AFC + AVC TFC AFC = TVC AVC = ATC MC = Да

A: Fixed cost is the cost that is same for all levels of production and marginal cost is the cost that…

Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

4. If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of
output is $30.23, what will happen to the average cost of production if the 15th unit is produced?
1. Average cost will fall.
My question is why will Average cost fall?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

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?
What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?
How do we calculate each of the following: marginal cost, average total cost, and average variable cost?
Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost, variable costs, and marginal cost?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
What are diminishing marginal returns as they relate to costs?
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
How does fixed cost affect marginal cost? Why is this relationship important?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
What are explicit and implicit costs?