A firm’s short-run marginal cost______________________________. increases with output remain constant within the relevant range shows the change in total costs that results when an additional unit of output is produced includes the cost of machinery and equipment

A firm’s short-run marginal cost______________________________. increases with output remain constant within the relevant range shows the change in total costs that results when an additional unit of output is produced includes the cost of machinery and equipment

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter3: Benefits, Costs, And Decisions

Section: Chapter Questions

Problem 6MC

See similar textbooks

Related questions

Q: The following is cost Information for the Creamy Crisp Donut Company. Entrepreneur's potentlal…

A: Given:Entrepreneur potential earnings as a salaried worker=$40,000 Annual lease on building=$25,000…

Q: Define different types of costs. Explain Fixed and Variable costs with the help of examples.

A: Types of cost in short run Fixed Costs (FC) It is the cost of fixed factors.The costs which don’t…

Q: Question 17 The production period in which at least one input is fixed in quantity is the production…

A: Factors of production are the building blocks that are used as inputs in the production of goods and…

Q: The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential…

A: The economic cost is the sum of all losses of any goods that have a monetary value attached to them…

Q: Course: Microeconomic - Long and short run costs The company "Mr. Tomas" manufactures tricycles…

A: Tricycle is a function of function of two set of inputs : Steering wheel , seat & frame : (v)…

Q: Joe quits his computer programming job, where,he was earning a salary of $50,000 per year, to start…

A: Accounting cost also known as money cost or explicit cost can be defined as the costs which the firm…

Q: True or False. Please explain The production function f(x1,x2,x3) = (min{0.5x1;0.75x2 })0.5 ·x30.5…

Q: ii) Listed in the table is the short-run total cost for Firm C. Output 1 2 3 4 Cost 20 39 57 74 90…

A: The diminishing return means the marginal cost should increase as the output increases.

Q: UESTION ONE 1.1 Discuss the relationship between the three short-run total cost curves. Use a…

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

Q: Long-run total cost (dollars) Quantity 20 100 40 160 60 180 80 190 The cost data in the above table…

A: Economies of scale are cost advantages that the company enjoys in the form of decrease in average…

Q: Interpret the diagram below and discuss your understanding of the concept of the inflexibility of…

A: In different time the behaviour of input changes like in short run only one factor is changeable…

Q: QUESTION 4 (Theory of Production and Cost) a. Define and illustrate Total, Marginal and Average…

A: Since you have posted multiple questions, we are answering the first one for you. If you want a…

Q: Question 21.21. Which would be an implicit cost for a firm? The cost of worker wages and…

A: In the market, when an individual makes a decision, he needs to choose one product over another due…

Q: 57: The creation of a unit of good Y requires the work of 3 specialists and 7 units of capital. The…

A: Inputs: 3 Specialists 7 units of capital Going pay per labor = $4 Lease on a unit of capital = $1

Q: “In the short run, a company has to operate as efficient as possible to accomplish the profit…

A: Please repost your question, as we are allowed to answer only 2 questions. a In achieving the short…

Q: ncreasing marginal returns occur Select one: a. As output increases at low levels of production b.…

A: Marginal returns refers to the change in the total output when an additional variable factor of…

Q: Last year Doreen's Dairy earned a total revenue of $42 thousand from selling 7 thousand pounds of…

A: The provided information are: Variable cost = $28 thousand Total cost = $40 thousand

Q: The accompanying table shows the total daily output for a firm producing specialty cakes and…

Q: A firm is using 500 units of capital and 20O units of labor to produce 10,000 units of output.…

A: The Production function is a combination of Labor and capital f(K,L) = wL + rK where w= Price of…

Q: Q38 A firm's short-run marginal costs are decreasing if... a. Marginal product is decreasing. b.…

A: Marginal product and marginal cost have inverse relationship.

Q: Refer to the data. Creamy Crisp's implicit costs are: A. $150,000 B. $94,000 C.…

A: Implicit costs are the foregone costs of the business.

Q: What should he recommend as a short-run remedy?

A: Marginal product of labour in plant B is higher than Plant A

Q: The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential…

Q: The accompanying table shows the total daily output for a firm producing specialty cakes and…

A: Total Cost is the sum of fixed and variable cost. Fixed cost remains the same for all units of…

Q: The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential…

A: Explicit costs are the actual out of pocket expenditures of a firm while implicit costs are the…

Q: The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential…

A: explicit cost are those cost which is bear by producer when they use the external service or hire…

Q: Solve the attachment.

A: Short run is when there exists a fixed factor of production and other are variable factors of…

Q: (Production in the Short Run) Complete the following table. At what point does diminishing marginal…

A: Marginal product refers to the additional output that obtained by increasing one more unit of…

Q: QUESTION 13 The short term is a period of time: O of one year or less where a firm can finish one…

A: Hi! thanks for the question but as per the guidelines, we answer only one question at one time.…

Q: 29. Vanable costs: aDo not exist in the long run. b. Are the only costs that exist in the long run.…

A: Costs incurred on fixed factors that cannot be altered in the short run are called Fixed Costs. They…

Q: Marginal Variable Fixed Product Cost Cost Labor Output $0 $5 100 100 $5 250 $10 3 350 $15 4 50 $20…

A: In a market, total output and total Product are same thing and it can be computed with the help of…

Q: Question 4' A firm's long-run total cost is TC(Q)=402-10Q²+Q³. Over what range of output does the…

A: Total cost of production is the total expenditure incurred by the firm on the factors of production…

Q: The data in the table below represents Total product (TP), for an agri-business involved in potato…

A: Given, Capital (fixed factor) Labor (variable factor) Output(units) or Total physical…

Q: Find the attached file.

A: Long run cost is the cost where there are no fixed factors of production. In short run, some factors…

Q: A firm experiemces A) diseconomies of scale, average total cost curve slopes downward B) economies…

A: C)diminishing marginal Returns; average total cost curve shift upward

Q: Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only…

A: Suppose Ike's bike is presently producing 500 bikes per month in its only factory. its short run…

Q: Cost RevenueRevenue Quantity Variable Price costs PER UNIT 0 $0.00 $5,3 1 $5.50 $5,3 2 $6.00 $5,3 3…

A: The marginal cost refers to the additional cost that the producer incurs when he/she chooses to…

Q: Question 21.21. Which would be an implicit cost for a firm? The cost of worker wages and…

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

Q: Question 24.24 Variable costs are sunk costs. costs that change every day.…

A: Variable costs are those costs that change in proportion to the level of production. This implies…

Q: 49. Last year Doreen's Dairy earned a total revenue of $42 thousand from selling 7 thousand pounds…

A: Here the variable cost given is $28 thousand Total cost given is $40 thousand To get the fixed cost:…

Q: Exercise No. 5 Production and Costs Course & Section: Name: IDENTIFICATION Marginal cost output…

A: IDENTIFICATION Marginal cost 1. The additional cost from an additional unit of output produced.…

Q: Question 10 TT Quantity of Output Fixed Costs Variable Costs 15 2 15 12 4 15 23 15 38 8. 15 46 10 15…

A: Total cost = total fixed cost + total variable cost Marginal cost = (change in total cost / Change…

Question

A firm’s short-run marginal cost______________________________.

increases with output
remain constant within the relevant range
shows the change in total costs that results when an additional unit of output is produced
includes the cost of machinery and equipment

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

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

ACME Coal paid $5,000 to lease a railcar from the Reading Railroad. Under the terms of the lease, $1,000 of this payment is refundable if the railcar is returned within two days of signing the lease. 1. Upon signing the lease and paying $5,000, how large are ACME’s fixed costs? Its sunk costs? 2. One day after signing the lease, ACME realizes that it has no use for the railcar. A farmer has a bumper crop of corn and has offered to sublease the railcar from ACME at a price of $4,500. Should ACME accept the farmer’s offer?
Which of the ff statements are true about cost function a. It estimate the total cost of production given a specific budget b. It helps predict what the marginal cost would be to produce a product at different levels of output c. It allows management to evaluate how efficiently the production process was at the beginning of the operation period d. It helps manager understand the price behavior of the product A firm profit maximization point is where a. Total revenue Is greater than total cost b. Marginal revenue is equal to marginal cost c. Marginal revenue is greater than total cost d. Marginal cost is less than total cost
A firm faces the following costs: total cost of capital = $1,000; price paid for labor = $12 per labor unit; and price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5,000 units of output? b. Now assume the firm improves its production process so that it can produce 6,000 units of output this year by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 6,000 units of output? c. If units of output can always be sold for $1 each, then by how much does the firm’s profit increase after it improves its production process? d. Suppose that implementing the improved production process would require a one-time-only cost of $1,100. If the firm only considers this year’s profit, would…
1. The amount of fixed factory costs applied to the product during the first 6 months under absorption costing is? A. Over-applied by $20,000. C. Under-applied by $40,000. B.Equal to the fixed costs incurred. D. Under-applied by $80,000. 2. Reported net income (or loss) for the first 6 months under absorption costing is? A. $160,000 B. $0 C. $40,000 D. $(40,000) 3. Reported net income (or loss) for the first 6 months under variable costing is? A. $180,000 B. $40,000 C. $0 D. $(180,000)
True/False: 1. Implicit costs are those costs, which have been incurred in the past and cannot be recovered bycurrent decisions.2. It is possible for the economic profit and accounting profit to be equal to one another.3. If Ed<1, an increase in price leads to higher revenue.4. In the long run, at least some of the inputs should be variable.5. Production is a transformation of resources in to goods and services.
Question Given the following cost function: TC = 1500 + 15Q – 6Q 2 + Q3 (a) Determine the total fixed cost for producing 1000 units of output and 500 units of output. (b )What is AFC at: 1000 units of output b) 500 units of output iii. (c) Determine TVC, AVC, MC and AC at 50 units of output
Gooey Bites sells snack packs for $3 per pack. Variable expenses involved in producing snack packs are estimated to be $1 per pack and fixed costs for operating the production line are estimated to be $14,000. After making changes to the production line, Gooey Bites made a profit of $36,000 by selling 20,000 snack packs. Variable costs were modified by the line changes but fixed costs were unaffected. What is the new variable cost per pack? a. $0.33 b. $0.50 c. $1.00 d. $1.50
A project currently generates sales of $10 million, variable costs equal to 40% of sales, and fixed costs of $2.3 million. The firm's tax rate is 20%. The project will last for 10 years. The discount rate is 13%. How much can fixed costs increase before accounting profits turn negative? Express your answer in millions rounded to 2 decimal places
Increasing marginal returns occur Select one: a. As output increases at low levels of production b. Whenever total product increases at an increasing rate c. As output increases at high levels of production d. Through the entire range of production
Constrained Optimization A firm's total cost function is: C = 6x2 - xy + 10y2 + 30, subject to the production quota x + y = 34. Construct the Lagrange function and solve for the equilibrium values. Calculate the total cost. What is the equilibrium value of x? What is the equilibrium value of y? What is the equilibrium value of λ? What is the optimized value of cost? What is the value of the determinant of the bordered Hessian matrix? Based on the value of the determinant of the bordered Hessian matrix, comment on the optimized value of Cost. (Answer in one word.)
Inventory Costing Methods—Periodic MethodThe Luann Company uses the periodic inventory system. The following July data are for an item in Luann's inventory: July 1 Beginning inventory 30 units @ $9 per unit 10 Purchased 50 units @ $11 per unit 15 Sold 60 units 26 Purchased 25 units @ $13 per unit Calculate the cost of goods sold for July and ending inventory at July 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) the weighted-average cost methods. Note: Round your cost per unit to three decimal places, if needed. Then round your final answers to the nearest dollar. A. First-in, First-out: Ending Inventory Answer Cost of Goods Sold: Answer B. Last-in, first-out: Ending Inventory Answer Cost of Goods Sold: Answer C. Weighted-average cost: Ending Inventory Answer Cost of Goods Sold Answer
A carpenter hammers nails each day at work. In each of the first three hours 50 nails were hammered and the marginal product of the fourth and fifth hours of work is 40 and 20 nails, respectively. Diminishing returns will be experienced after the _____ hour. second third fourth first