CostLRAC40302010100 200400800Outputb. What happened to the cost of one good as the firm increased its output from 100 unitsto 200 units and from 200 units to 400 units?c. What is the firm experiencing as it increased it scale of operation from 100 units to400 units?d. What is the firm experiencing if it chooses to produce at point P? Give reason foryour answer.e. Which point would be the best point for the firm to produce at? Give reason for youranswer.

Answered: b. What happened to the cost of one…

b. What happened to the cost of one good as the firm increased its output from 100 units to 200 units and from 200 units to 400 units?

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 21PAE

See similar textbooks

Related questions

Q: For a producer under complete competition, the following production function applies. Q = F (K, L)…

A: Q = 4L L = 0.25Q When Q = 50, L = 12.5 Total cost (TC) = wL + rK TC = 10 x 12.5 + 5 x 4 TC = 125 +…

Q: When do firms decide to shut down production in the short run? Explain it.

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

Q: Use the following data to answer the question. The letters A, B, and C designate three successively…

A: By refering to the above table, In the long run, the firm should use plant size "A" for 10 to 30…

Q: A profit-maximizing firm incurs an economic loss of $30,000 per year. Its fixed cost is $25,000 a…

A: It is given that, a profit-optimizing firm incurs an economic loss (EL) of $30,000 per year and has…

Q: a. In the short run, is he maximizing his profits? Why? b. Given the conditions listed above, what…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: customers there while you golf. Why do you think a miniature golf course would stay open during the…

A: *answer:

Q: 3. Use the graph below to answer the questions that follow. Cost LRAC 40 30 20 10 100 200 400 800…

A: A long-run average cost curve shows the cost of producing each unit of output in the long-run. In…

Q: L Q TVC TC AVC AFC ATC MC 4 20 5 26 6 30…

A: Total cost is the sum of fixed and variable costs. Average cost is the per unit cost of output.…

Q: d. If the firm closes down and produces no output, what will be its total cost? e. If the firm…

A: Total Cost is the sum total of Total Variable Cost and Total Fixed Cost. It denotes the total cost…

Q: Which of the following profits represent economic profit? Choose all that apply. a. Your…

A: Economic Profit is the difference between total revenue and the sum of total explicit cost and…

Q: 1. Isoquant is also called equal product curve, why?

A: Since you have asked multiple questions, we will solve the first one as per the guidelines. Please…

Q: 3. Use the graph below to answer the questions that follow. Cost LRAC 40 30 20 10 100 200 400 800…

A: Economies of scale refers to the optimization of the available resources for the process of…

Q: What must an entrepreneur do to earn a profit? How do theactions of firms earning profits inuence…

A: Protecting one's hard work through patents and copyright acquisition is one of the most significant…

Q: 20 300 30 480 |40 700 50 1000 (a) Calculate the total cost, average variable cost, average total…

A: Total cost is the sum of the variable cost and the fixed cost.

Q: In the short run, the average total cost of producing 200 pizzas is $ A In the long run, the average…

A: The short run is the period where at least one factor of production is fixed and cannot be changed.…

Q: Suppose that firms in the zipper industry have the production technology: F(K,L)=4K^(3/4) * L^(1/4)…

A: Answer: Given: Production function: FK,L=4K34×L14 Cost/price of labor = 27 Cost/price of capital =??…

Q: 2.7 The following is a total cost curve. Sketch the correspond- ing marginal cost curve. If the…

A: The marginal cost (MC) represents the additional costs incurred in producing one extra unit of the…

Q: We expect the marginal cost to increase as this firm produces more computers. But when the firm…

A: The rise or fall in the cost of producing/providing one more product is referred to as marginal…

Q: 6. If the Marginal Cost for a product is found to be MC = 8x + 60, and the Marginal Revenue is given…

A: We are going to use Profit maximization method to answer this question. Use differentiation and…

Q: Why would a firm that incurs losses choose to produce rather than shut down? Why could this choice…

A: In short run firm exhibits return to factor where only one factor is variable and another factor is…

Q: C. What is Karol's fixed cost per lobster at an output level of 60,000? D. At an output level of…

A: In the given question, the cost curves of Karol's Lobsters Inc is given. We know that: Total Cost =…

Q: 4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-run and the…

A: Perfect competition is a market structure that has a large number of buyers and sellers who have…

Q: Does a competitive firm’s price equal its marginalcost in the short run, in the long run, or…

A: In perfectly competitive market there are many sellers as well as buyers. Price is given that means…

Q: What is relationship between total revenue (TR) and cost (TC) if the price is greater than ATC (is…

A: If the price is greater than ATC, the total revenue (TR) is greater than the total cost (TC). The…

Q: possible. 3.- If the marginal income is greater than the marginal cost, the competitive company…

A: 3. If the marginal income is greater than marginal cost, then it gives out a positive output.

Q: What are the short-run and long-run costs of the production of Walmar

A: There are various costs incurred by a firm during its production process and even in the pre and…

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: What does it mean to be operating a firm in the "long run?"

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

Q: you assume that a firm has a U-shaped average cost curve, why would large and small firms have…

A: The economies and diseconomies of scale lead to the U shaped average cost curve.

Q: SE THE GRAPH TO ANSWER THE FOLLOWING QUESTIONS: (IF REQUIRED, USE THE DISCREET NUMBER OF BARRELS).…

A: The maximizes profits where the MR= MC. The MC curve cuts the AVC cost curve at its minimum point.…

Q: Which of the following is NOTa short run decision that a firm faces? (ר "If sales are not good,…

A: Answer to the question is as follows:

Q: In the short run, a firm's total costs of producing 100 units of output equal $10,000. If it…

A: The firms, and businesses are the entities who are involved in the production activities, and the…

Q: The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for…

A: Fixed cost is independent of output produced whereas variable cost varies with the level of…

Q: c. Does the firm operate in the short run or long run? Why? d. What is the efficient scale of the…

A: Answer to the question is as follows:

Q: A9. The diagram below depicts a firm's short-run production function and two isoprofit lines (and).…

A: A firm hires factors of production from the household sector in the form of land, labor, capital and…

Q: How do you derive the marginal cost (MC) curve of a firm? b) How are average variable cost (AVC) and…

A: Marginal cost is the additional cost that is incurred in order to produce an additional unit of an…

Q: Cost LRAC 40 30 20 10 100 200 400 800 Output b. What happened to the cost of one good as the firm…

A: Marginal is the cost of producing 1 additional unit of output.

Q: Table: Cherry Farm Quantity of cherries Total Cost (in pounds) S2 13 16 21 28 38 Use Table: Cherry…

A: The average total cost (ATC) reflects the cost incurred per unit of output produced.

Q: 16) Suppose the total cost of producing T-shirts can be represented as TC = 50 + 2q, where q is…

A: Marginal cost refers to the change in total cost with respect to change in output. Variable cost is…

Q: A. How much is the fixed cost to produce the natural-organic oil? B. How many barrels of…

A: Disclaimer :- since you asked for multi part question we are solving the first 3 subpart only as per…

Q: How much will the firm produce in order to maximise profits at a price of £8 per unit and What…

A: With price of 8$, the profit maximizing firm in perfectly competitive market will produce 70 units…

Q: We expect the marginal cost to increase as this firm produces more computers. But when the firm…

A: Marginal cost (MC) is the change in total cost or total variable cost per unit change in output.

Question

Cost
LRAC
40
30
20
10
100 200
400
800
Output
b. What happened to the cost of one good as the firm increased its output from 100 units
to 200 units and from 200 units to 400 units?
c. What is the firm experiencing as it increased it scale of operation from 100 units to
400 units?
d. What is the firm experiencing if it chooses to produce at point P? Give reason for
your answer.
e. Which point would be the best point for the firm to produce at? Give reason for your
answer.

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

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?
In choosing a production technology, how will firms react if one input becomes relatively more expensive?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect me lung-nm average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
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?