5. A firm pays $320 per day in rent for equipment used to make shoes. The total cost of producing 20 pairs of shoes is $1200. Find the cost equation C(x). What is the fixed cost for this firm? What is the marginal cost?

5. A firm pays $320 per day in rent for equipment used to make shoes. The total cost of producing 20 pairs of shoes is $1200. Find the cost equation C(x). What is the fixed cost for this firm? What is the marginal cost?

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 5CQQ

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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

5. A firm pays $320 per day in rent for equipment used to make shoes. The total cost of
producing 20 pairs of shoes is $1200. Find the cost equation C(x). What is the fixed cost for
this firm? What is the marginal cost?

Expert Solution

Step 1

Given:

Rent for equipment=$320 per day

Total Cost of 20 pairs=1200

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