Isabel runs her family's small pineapple processing plant, which takes fresh pineapples and cuts them into pineapple rings, spears, and chunks. The capital stock of the firm consists of three machines of various vintages, each of which can process the pineapples into any of the three different forms. All of the machines are in excellent condition, and all machines can be running at the same time. 1.00- 0.90- 0.80- Maximum Total Capacity (Pineapples) per Day Cost of Processing per Pineapple $0.20 0.70- Machine 1 Machine 2 300 0.60- 0.30 250 ㅎ 0.50 Machine 3 0.60 200 0.40 Assume that "cost of processing" includes all labor and materials, including the owner's wages. ASsume further that Isabel's family signed a long-term contract (20 years) with a service company to keep the machines in good repair for a fixed fee of $3,650 per year, or $10 per day. 0.30- 0.20- In the diagram on the right, derive the firm's marginal cost curve. 0.10- 1.) Using the multipoint curved line drawing tool, draw the firm's marginal cost curve. Label your curve "MC'. 0.00- 10 11 12 Note: Use the multipoint curved line drawing tool one time to draw the entire curve. Units of output (hundreds) Marginal cost ($)
Isabel runs her family's small pineapple processing plant, which takes fresh pineapples and cuts them into pineapple rings, spears, and chunks. The capital stock of the firm consists of three machines of various vintages, each of which can process the pineapples into any of the three different forms. All of the machines are in excellent condition, and all machines can be running at the same time. 1.00- 0.90- 0.80- Maximum Total Capacity (Pineapples) per Day Cost of Processing per Pineapple $0.20 0.70- Machine 1 Machine 2 300 0.60- 0.30 250 ㅎ 0.50 Machine 3 0.60 200 0.40 Assume that "cost of processing" includes all labor and materials, including the owner's wages. ASsume further that Isabel's family signed a long-term contract (20 years) with a service company to keep the machines in good repair for a fixed fee of $3,650 per year, or $10 per day. 0.30- 0.20- In the diagram on the right, derive the firm's marginal cost curve. 0.10- 1.) Using the multipoint curved line drawing tool, draw the firm's marginal cost curve. Label your curve "MC'. 0.00- 10 11 12 Note: Use the multipoint curved line drawing tool one time to draw the entire curve. Units of output (hundreds) Marginal cost ($)
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.4IP
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Transcribed Image Text:Isabel runs her family's small pineapple processing plant, which takes fresh pineapples and cuts them into pineapple
rings, spears, and chunks. The capital stock of the firm consists of three machines of various vintages, each of which can
process the pineapples into any of the three different forms. All of the machines are in excellent condition, and all
machines can be running at the same time.
1.00-
0.90-
0.80-
Maximum Total Capacity (Pineapples)
per Day
Cost of Processing
0.70-
per Pineapple
$0.20
Machine 1
300
0.60-
Machine 2
0.30
250
0.50-
Machine 3
0.60
200
0.40-
Assume that "cost of processing" includes all labor and materials, including the owner's wages. Assume further that
Isabel's family signed a long-term contract (20 years) with a service company to keep the machines in good repair for a
fixed
0.30-
$3,650 per year, or $10 per day.
0.20-
In the diagram on the right, derive the firm's marginal cost curve.
0.10-
1.) Using the multipoint curved line drawing tool, draw the firm's marginal cost curve. Label your curve 'MC'.
0.00-
1
10 11
3
4
6
7
8
9
12
Note: Use the multipoint curved line drawing tool one time to draw the entire curve.
Units of output (hundreds)
Marginal cost ($)
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