Exhibit 7-6 Output Rent Cost of Materials Labor $200 10 200 100 200 250 100 20 200 200 30 200 300 40 200 350 400 50 200 500 500 4. Given the information in Exhibit 7-6, what is fixed cost? a. S0 b. $200 c. $500 d. Fixed cost depends on output level e. We cannot calculate fixed cost without knowing which inputs are fixed.

Exhibit 7-6 Output Rent Cost of Materials Labor $200 10 200 100 200 250 100 20 200 200 30 200 300 40 200 350 400 50 200 500 500 4. Given the information in Exhibit 7-6, what is fixed cost? a. S0 b. $200 c. $500 d. Fixed cost depends on output level e. We cannot calculate fixed cost without knowing which inputs are fixed.

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 23RQ: Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost,...

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Similar questions

Which costs are measured on per-unit basis: fixed costs, average cost, avenge variable cost, variable costs, and marginal cost?
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
Are fixed costs also sunk costs? Explain.
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
How does fixed cost affect marginal cost? Why is this relationship important?
What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?