Betty's BakeryQuantityofcakes12345678$14$34$28$15FixedCostVariableCost$13$28$64$108$133-TotalCost$38$70$110$185Average AverageFixedVariableCostCostAverageTotalCostWhat is the marginal cost of the 2nd cake at Betty's Bakery?MarginalCost

Marginal cost refers to the increase or decrease in the cost of producing one more unit or serving…

Betty's Bakery Quantity of cakes 1 2 3 4 5 6 7 8 Fixed Cost Variable Cost $13 $28 $64 $108 $133 Total Cost $38 $70 $110 $185 Average Fixed Cost Average Variable Cost Average Total Cost What is the marginal cost of the 2nd cake at Betty's Bakery? Marginal Cost

Betty's Bakery Quantity of cakes 1 2 3 4 5 6 7 8 Fixed Cost Variable Cost $13 $28 $64 $108 $133 Total Cost $38 $70 $110 $185 Average Fixed Cost Average Variable Cost Average Total Cost What is the marginal cost of the 2nd cake at Betty's Bakery? Marginal Cost

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 32CTQ: How does fixed cost affect marginal cost? Why is this relationship important?

See similar textbooks

Related questions

Q: 3. Question 3 A country, called 'Bikyland', does not allow for international trade. Bikyland…

A: Dear student, you have asked multiple sub-part questions in a single post.In such a case, as per the…

Q: Suppose that Karen deposits $500 into her checking account at the bank. The reserve requirement for…

A: Given information: Given the deposit amount = $500 Reserve requirement = 7%

Q: What is the economist’s definition of public goods? Why are public goods associated with market…

A: In neoclassical economics, market failure is a situation in which the allocation of goods and…

Q: New research demonstrates that celery is a healthy snack. The resulting increase in demand for…

A: The measure that depicts various quantities of goods and services being demanded and supplied at…

Q: Suppose two firms, Firm A and Firm B, are competing by setting quantities (Cournot competition).…

A: In a Cournot Duopoly Model both the firms in the market simultaneously choose the profit maximizing…

Q: The equilibrium price will be determined entirely by the demand when a.demand is perfectly…

A: The price and quantity traded in the economy are determined by two fundamental ideas: supply and…

Q: Suppose the supply and demand equation are given as follow: Demand: Qd=142-2*p Supply: Qs=12+2*p…

A: The demand curve depicts the quantity demanded at each price level, keeping other factors of demand…

Q: se, 1. Use the diagram below to answer the next three questions. Outcome of 500, 500 The course of…

A: "Firms produce products and services in order to generate profits but while producing them firms…

Q: Individuals with initial wealth $100 and different preferences over risk are considering purchasing…

A: INTRODUCTION: PROBABILITY: Probability is a department of mathematics that offers with calculating…

Q: What is multiple tax system? Write its merits and demerits

A: Taxes are defined as compulsory charges levied by the government on teh citizens. These taxes…

Q: th point is not on the perfectly competitive firm's short-run supply c Multiple Choice O F

A: Perfectly competitive firm is price taker in the market. The MC curve above the Average variable…

Q: P, R, C A B C 0 I G -The profit maximization condition is where -. The profit maximization quantity…

A: Disclaimer:- Since you asked multipart questions we are solving only the first 3 questions as per…

Q: Use the following data to analyze the condition when the product proce is set at $41 Assume the…

A: Profit maximizing conditions for a competitive market are - Necessary Condition : P = MC Sufficient…

Q: Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet…

A: The money multiplier is a peculiarity of making money in the economy as credit creation.

Q: How large a tax cut would be needed to achieve the same increase in aggregate demand? $ 13 bilion b.…

A: In economics, the marginal propensity to consume is a metric that quantifies induced consumption,…

Q: Question 22 Consider the following Extended Form Game: 01 02 04 A O 3 (2,3) P1 A' (5,5) A' B (3,8) A…

A: In the study of game theory, extensive form games is defined as the way of describing any game with…

Q: Suppose Justine and Sarah are playing the dictator game. Justine is the dictator and has $150 to…

A: The Dictator Game is an economic game that is intended to scrutinize the standard economic…

Q: E1 Choose two of the kinds of monopolies listed below, explain each. You must use APA…

A: The discriminatory monopoly appears when the producer (monopolist) of the product charges different…

Q: Theories should be judged based upon how a. consistently and accurately they predict. b.…

A: Theories are formed to explain the economic phenomena, under which it is explained that why and how…

Q: A tax exempt municipality is considering the construction of a new municipal waste water treatment…

A: Given The first or initial cost for alternative A=-$15,361,975 First cost of alternative B…

Q: When inflation rises, people must pay a higher rate on their loans. This is called the effect and it…

A: The shift in borrowing and spending habits following an interest rate modification is known as the…

Q: Suppose that a firm produces wool jackets in a monopolistically competitive market. The following…

A: Firms working under monopolistic competition vary from perfectly competitive firms. The item they…

Q: Blake&Sons run a business of manufacturing animal trackers in Lansing, Michigan. It employs a total…

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

Q: In a Cobb Douglas production function the marginal prod a. the quantity of labor increases. b. the…

A: In economics and econometrics, the Cobb–Douglas production function is a particular functional form…

Q: Use the following data to analyze the condition when the product price is set at $56. A. How much…

A: The profit-maximizing output is achieved in purely competetive market is when:P=MCNow, P=$56We will…

Q: Two gas stations, A and B, are locked in a price war. Each player has the option of raising its…

Q: Situation 37-2 Dan and Ann live in the same community and both can participate in two activities,…

A: The maximum sum of money a consumer will spend on an additional commodity or service is known as the…

Q: following real GDP is $800 billion, potential real GI $950 billion, the MPC is .80, and the MPL

A: A recession can be described as a sustained period of weak or negative decelipment in real GDP…

Q: QUESTION 57 In general, horizontal mergers will O increase the number of firms in an industry. O…

A: The horizontal merger occurs in the same industry where the similar products are produced.…

Q: 11

A: A perfectly competitive firm is a price taker because the price is decided by the demand and supply…

Q: At the market equilibrium quantity in Figure A, what is the marginal external cost? a) $6 b) $8 c)…

A: Marginal external cost (MEC) is the cost incurred by the third party from the production of one…

Q: In 4-5 sentences, in your own words, explain the vicious circle of poverty that afflicts low-income…

A: The vicious circle of poverty theory was developed by the Nurkse. It explains the cause of…

Q: Which of the following is true? a. All economists agree that the tax multiplier is smaller than…

A: Government spending multiplier = ratio of change in income/ratio of change in government spending.

Q: 11. Which of these figures portrays the market failure of positive externalities (positive external…

A: Externality is the cost or benefit that the market transaction brings to the third party. It can be…

Q: The following graph represents the demand and supply of retail labor in California. Which of the…

A: "In a labor market, demand for labor LD represents the demand for labor by firms to be involved in…

Q: Questions solve 3 others downvote

A: The demand (dd) for a commodity shows the quantity that the consumers desire to purchase at the…

Q: During 2015, there was a substantial increase in stock prices, as well as a reduction in the world…

A: The long run aggregate supply curve is thought to be an upward curve at the economy's ongoing…

Q: Assuming demand changed from D2 to D1 as a result of an increase in consumer income from $10,000 to…

A: Income elasticity of demand measures the responsiveness of demand to change in income, keeping other…

Q: demand curve of the perfectly competitive firm is downward-sloping and the demand curve in the…

A: Perfect competition is an ideal type of market structure where all manufacturers and consumers have…

Q: 7. Suppose nominal GDP rose from $500 billion to $600 billion while the price index increased from…

A: Rise in the nominal GDP could be due to rise in real output or rise in the price level. The Nominal…

Q: Calculate the desired excess reserves ratio for the whole economy.

A: Total demand deposits in the economy = Demand deposits at Bank One + Demand deposits at Bank Two…

Q: a. A certain sum of money amounts to 7/4 of itself in 3 years. The simple interest rate is? b. The…

A: Simple interest means the cost of borrowing.

Q: Which of the following predictions is consistent with public choice theory? a. Voters always…

A: Public choice refers to the use of economic tools to deal with traditional problems of political…

Q: Consider two countries Home and Partner trading industry goods. Partner’s supply curve can be…

A: Given information Partner's supply curve XSp=P-1 Other worlds supply curve XSrow=P-1 Import demand…

Q: Uncoventional monetary policy: financial policy and quantitative easing Suppose that the IS and LM…

A: Given information IS function: Y=C*(Y-T)+I*(Y, r+x)+G LM: r=r* C= consumption Y= income level Y= tax…

Q: Suppose that the monopolist can produce with total cost: TC 20Q. Assume that the monopolist sells…

A: The Monopoly firm can exercise the price discrimination to increase the profit level. Firm tends to…

Q: Suppose the world interest rate drop from r-5 to 2percent (assume government G-750). Find the…

A: The exchange rate at which the demand for a currency and supply of the same currency are equal. The…

Q: QI. In this module we learned about severalreal-world complications that make monetary and fiscal…

A: Fiscal policy: It refers to the policy that help the government to increase the demand in the…

Q: Consider again the same economy with two banks: Bank One and Bank Two. Partial balance sheet…

A: The required reserve ratio can be communicated as a ratio of the money that a bank holds in the…

Q: In the Insulin market, the government decides to regulate a Without this regulation, how many…

A: Given information; In the insulin market, the government decides to regulate a price with a ceiling…

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

Betty's Bakery
Quantity
of
cakes
1
2
3
4
5
6
7
8
$14
$34
$28
$15
Fixed
Cost
Variable
Cost
$13
$28
$64
$108
$133-
Total
Cost
$38
$70
$110
$185
Average Average
Fixed
Variable
Cost
Cost
Average
Total
Cost
What is the marginal cost of the 2nd cake at Betty's Bakery?
Marginal
Cost

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

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?
A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
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?
What are explicit and implicit costs?
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?
Please complete the below table. Output TotalFixed Cost TotalVariable TotalCost AverageFixed AverageVariable AverageTotal cost MarginalCost 0 20 1 10 2 6 3 24 4 13.5 5 66 6 14 7 76 8 114
Table: Spring Water Quantity(Cases) Price TotalRevenue MarginalRevenue MarginalCost AverageTotalCost Total Cost 0 $16 $0 $25 $15 $10 1 $15 $15 35.00 $35 $13 $6 2 $14 $28 20.50 $41 $11 $4 3 $13 $39 15.00 $45 $9 $2 4 $12 $48 11.75 $47 $7 $3 5 $11 $55 10.00 $50 $5 $3 6 $10 $60 8.83 $53 $3 $5 7 $9 $63 8.29 $58 $1 $9 8 $8 $64 8.38 $67 Reference: Ref 15-12 Table: Spring Water Table: Spring Water. The table shows the demand and cost data for a firm in a monopolistically competitive industry producing drinking water from underground springs. The profit-maximizing output is _____ cases. Select one: a. 7 b. 5 c. 6 d. 8
The manager of the donut shop tells you that hesells donuts for $1 each, and that if he were to makeadditional donuts, based on his current level ofoutput, it would cost him $0.80 per donut. Do yourecommend that the manager increase or decreasethe number of donuts he makes?
A firm produces two different kinds, A and B, of a commodity. The daily cost of producingx units of A and y units of B isC(x, y) = 2x2 − 4xy + 4y2 − 40x − 20y + 514Suppose that the firm sells all its output at a price per unit of $24 for A and $12 for B. Findthe daily production levels x and y that maximize profit. (Be sure to show your first andsecond order conditions.)
You are planning to setting up a Fruity Juice Stand. The stand itself costs IDR2,000,000,- The ingredients for each plastic glass of Fruity Juice costs IDR 5,000,- a. What is your fixed cost of doing business? What is your variable cost perplastic glass of fruity juice? b. Construct a table showing your total cost, average total cost, and marginalcost for output levels varying from 0 to10 gallons. (Hint: There are 16 plasticglass in a gallon) c. Draw the three cost curves!
3. The company that you manage has already spent $8 million on developing a new product – awebsite that combines You Tube, Twitter, and Facebook – called You Twit Face. Thedevelopment is not quite finished. It will cost an extra $2 million to finish development andcomplete the product. Assume that this $2 million amount includes the explicit costs and anyopportunity cost that the company may have. At a recent meeting, your salespeople report thatthe expected sales of your new product (if you finish) are $6 million total. If you do not finishdeveloping the product you can sell the incomplete product to another company for $2 million. What is the MC of finishing the development? __________________ What is the MB of finishing the development? __________________ Should you finish the product? Why or why not? Use the idea of “thinking at the margin” toexplain your answer. Need details explanation