Answered: How does fixed cost affect marginal…

Business

Economics

How does fixed cost affect marginal cost? Why is this relationship important?

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: Question: What are the kinds of cost which firm face in short run. Explain theoretically and…

A: Short run is the time period wherein some inputs are held fixed while other inputs are variable. In…

Q: B. Refer to the figure below. LRAC a. In the short run, capital is a fixed cost. Draw for a few…

A: Short Run Average Cost (SRAC) is equal to average fixed cost and average variable cost. It is…

Q: Refer to Figure 13-4. Curve A represents which type of cost curve? O marginal cost O average total…

A: The curve A is negatively sloped. It is continuously falling and never rises. Curve A is relatively…

Q: Capital (K) Labor (L) Total Product (TP) total fixed cost (TFC) total variable cost (TVC)…

A: 1.1. Assume that the cost of capital is 20 and the cost of labor is $10. Total fixed cost (TC) can…

Q: How and why does a firm’s average-total-cost curvein the short run differ from its…

A: Total cost (TC) equals the total fixed and variable costs. An average total cost function is the…

Q: How are the marginal cost curve and average variable cost (AVC) curve related? Explain why the AVC…

A: Marginal cost (MC) is that the cost of manufacturing an additional unit of output.Average variable…

Q: l in the column for marginal cost in the previous table. (Hint: MC = 4) l in the column for average…

A: In economics, the marginal price is the alternate withinside the overall price that arises whilst…

Q: The marginal cost curve intersects the average total cost curve at the level of output where average…

A: Marginal Cost (MC): Marginal cost occurs when producing an extra unit of output. Average total cost…

Q: 9. What is the relationship between Marginal Cost and Average Total Cost?

A: The total amount paid for resources used to produce a product or to create a service, such as…

Q: 1. Explain the meaning of: a. Fixed cost b. Variable cost Stating an example of each above.

A: Since both are different questions, we will answer the first one only. Please resubmit the other…

Q: What is the relationship between marginal product and marginal cost?

A: The firms, and businesses tend to operate in the markets, where they supply various goods, and…

Q: The set of lines below reflect information about the cost structure of a firm. Use the figure to…

A: The total cast is defined as the expenses being incurred by the producer in order to produce goods

Q: d. Which worker(s) are in the region of diminishing marginal returns? e. Which worker(s) are in the…

A: marginal cost is the extra expense caused by the creation of another unit of a decent or…

Q: (d) What is the variable cost? ta What is the fixed cost?

A: since the cost of renting tuxes for choral societies formal is $19 down plus $85per tax. so, The…

Q: The shape of the Total Product curve on the production side gives us the shape of which curve on the…

A: Total product curve represents the total output of a firm in the short run.

Q: What is the shape of the average variable and average total cost curves and average fixed cost?…

A: One of three average curves is the average variable cost curve. The average variable cost curve is…

Q: How is the difference between average total cost and average variable cost impacted by an increase…

A: The total cost of a firm is the sum of the fixed cost and variable cost. Total cost increase with…

Q: hat is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why…

A: Marginal product refers to an addition to the total production by producing an extra unit of output.…

Q: . Jane’s Juice Bar has the following cost schedules:Quantity Variable Cost Total Cost0 vats of juice…

A: Total cost is classified into two parts, variable cost and fixed cost. In the short run fixed cost…

Q: What are Fixed and Variable Costs?

A: Fixed cost: Fixed cost refers to those costs which remain the same throughout the production.…

Q: Assume that the marginal cost of production is greater than the average variable cost. Can you…

A: The marginal cost of production is the incremental cost incurred when an additional unit of a good…

Q: . Why is the Average Total Cost curve U shaped?

A: Average Total cost in economics is the cost that indicates how firms choose to price their…

Q: Define total cost, average total cost, and marginal cost. How are they related?

A: Total Cost (TC) is the cost of production of a good and it includes both the variable cost i.e. the…

Q: Variable Costs Average Variable Cost Production Data Production Data The $60 per worker a day…

A: The variable cost is $60 per worker a day. At 90 units of output (i.e. when 90 cars are washed in a…

Q: "When the total cost of production decrease, we can say that the firm faces positive return to…

A: The firm would result in the production of the various goods and services which would involve the…

Q: n the following questions take Q as 10. . Name the curves in the diagram. A B C . What is the amount…

A: Since you have asked multiple questions, we will answer only the first question for you. If you have…

Q: Give the formulas for and plot average fixed cost, AFC, marginal cost, MC, average variable cost,…

Q: Complete the table as below: Where, TC= TOTAL COST, TFC = TOTAL FIXED COST, TVC= TOTAL VARIABLE…

A: The table requires various formulas which are listed below. TVC= TC- TFC Where TFC remains constant…

Q: Can total cost of the firm be zero? if yes what's the production point at this level

A: Total cost of the firm is the combination of fixed cost of the firm such as rent of the workplace…

Q: O b) diminishing marginal product.

A: The value of resources declined over time means the value of increase in total production decreases.…

Q: uestion 13 of 15 Production and Costs: End of Chapter Problems 12. Consider the relationship…

A: There is a significant relationship between marginal cost and average total cost as any change in…

Q: 4) What is the total variable cost?

Q: 4. What is the significance of the point where the marginal cost curve intersects the average total…

Q: e variable cost, and AC, the average cost. Complete the following cost table. (Enter numeric respc…

A: Fixed cost remains the same at each level of output. Hence, fixed cost corresponding to 2 units 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: a) What is marginal cost? b) What is average variable cost? c) How much output is being produced?

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

Q: Give some examples of the variable costs?

A: Variable Costs(VC) are those costs that varies with the quantity of output produced. If Q is the…

Q: a.)Suppose that labor is the only variable input in the production process. If the marginal cost of…

A: Note: You have uploaded two questions at a time . Hence, we shall answer only the first one for you.…

Q: Consider the following cost information for apizzeria:Quantity Total Cost Variable Cost0 dozen…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: c. What is the average and marginal cost of gumball production (again, measure output in thousands…

A: Total cost is the sum of total fixed cost and total variable cost. The average cost is the total…

Q: 9) What are two examples of fixed costs?

A: Hi, since you have asked for #3, providing answer for the 9th question that comes third. Total…

Q: Define explicit cost and implicit cost. Briefly discuss the law of diminishing marginal returns.

A: The costs broadly classified into two parts I) Explicit Costs II) Implicit Costs

Q: Give the formulas for and plot average fixed cost, AFC, marginal cost, MC, average variable cost,…

A: The total cost incurred by a firm operating in a market includes fixed costs and variable costs.…

Q: a) Complete the following table by filling in the fixed cost (FC), variable cost (VC), total cost…

A: Total Cost (TC) = Fixed cost (FC) + Variable cost (VC) or Variable cost (VC) = Total Cost (TC) -…

Question

c. How does fixed cost affect marginal cost? Why is this relationship important?

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

Would you consider an interest payment on a loan to a film an explicit or implicit cost?
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 a long-run average cost curve?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
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?
How do we calculate each of the following: marginal cost, average total cost, and average variable 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.
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 is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
In choosing a production technology, how will firms react if one input becomes relatively more expensive?
Small Mom and Pop firms, like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this?