Both Stan and Kyle own potate chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces O a. more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. Oc. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where MR > MC O a. the revenue gained by producing one more unit of output is less than the cost incurred by doing so, Ob. the firm is already maximizing profits because revenue is being increased by more than costs. O c. the revenue gained by producing one more unit of output exceeds the cost incurred by doing so. O d. the revenue gained by producing one more unit of output equals the cost incurred by doing so.

Both Stan and Kyle own potate chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces O a. more, the costs of Kyle's factory will exceed those of Stan's factory. Ob. more, their costs will be equal. Oc. less, the costs of Kyle's factory will exceed those of Stan's factory. Od. less, their costs will be equal. If a firm is producing where MR > MC O a. the revenue gained by producing one more unit of output is less than the cost incurred by doing so, Ob. the firm is already maximizing profits because revenue is being increased by more than costs. O c. the revenue gained by producing one more unit of output exceeds the cost incurred by doing so. O d. the revenue gained by producing one more unit of output equals the cost incurred by doing so.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 3P

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Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Which of the following statements is true? Hint: If the level of output changes, only the variable costs will change. a.If both produce more, Kyle's costs will exceed Stan's costs. b.If both produce less, their costs will still be equal. c.If both produce more, their costs will still be equal. d.If both produce less, Kyle's costs will exceed Stan's costs.
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