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9 Healthy Harry's Juice Bar has the following cost schedules: yC AY Q (vats) Variable Cost Total Cost $ 30 10 40 55 25 75 3 45 100 70 4 130 100 165 135 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is the relation- ship between the marginal-cost curve and the average-total-cost curve? Between the marginal-cost curve and the average-variable- cost curve? Explain. 10. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost poly $1 4 4 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market. 11. Suppose there are 1,000 hot pretzel stands oper- ating in New York City. Each stand has the usual

9 Healthy Harry's Juice Bar has the following cost schedules: yC AY Q (vats) Variable Cost Total Cost $ 30 10 40 55 25 75 3 45 100 70 4 130 100 165 135 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is the relation- ship between the marginal-cost curve and the average-total-cost curve? Between the marginal-cost curve and the average-variable- cost curve? Explain. 10. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost poly $1 4 4 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market. 11. Suppose there are 1,000 hot pretzel stands oper- ating in New York City. Each stand has the usual

Principles of Economics, 7th Edition (MindTap Course List)
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter13: The Cost Of Production
Section: Chapter Questions
Problem 9PA
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9 Healthy Harry's Juice Bar has the following cost schedules: yC AY Q (vats) Variable Cost Total Cost $ 30 10 40 55 25 75 3 45 100 70 4 130 100 165 135 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is the relation- ship between the marginal-cost curve and the average-total-cost curve? Between the marginal-cost curve and the average-variable- cost curve? Explain.
Transcribed Image Text:9 Healthy Harry's Juice Bar has the following cost schedules: yC AY Q (vats) Variable Cost Total Cost $ 30 10 40 55 25 75 3 45 100 70 4 130 100 165 135 a. Calculate average variable cost, average total cost, and marginal cost for each quantity. b. Graph all three curves. What is the relation- ship between the marginal-cost curve and the average-total-cost curve? Between the marginal-cost curve and the average-variable- cost curve? Explain.
10. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost poly $1 4 4 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market. 11. Suppose there are 1,000 hot pretzel stands oper- ating in New York City. Each stand has the usual
Transcribed Image Text:10. An industry currently has 100 firms, all of which have fixed costs of $16 and average variable cost as follows: Quantity Average Variable Cost poly $1 4 4 a. Compute marginal cost and average total cost. b. The price is currently $10. What is the total quantity supplied in the market? c. As this market makes the transition to its long-run equilibrium, will the price rise or fall? Will the quantity demanded rise or fall? Will the quantity supplied by each firm rise or fall? d. Graph the long-run supply curve for this market. 11. Suppose there are 1,000 hot pretzel stands oper- ating in New York City. Each stand has the usual
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