Short-Run Cost Question2: Lisa has a lawm-mowing business Lisa hires students at $40 a day to mow lawns. Lisa leases5 lawn mowers for $200 a day. The table gives the daily output Total product (students per day) (lawns cut per day) Labor 0. 20 2. 44 70 94 4. 114 120 6. a) Construct the total variable cost and total cost schedules. Variable Costs = Cost Per Unit x Total Number of Units. b) Construct the average fixed cost, average variable cost, and average total cost schedules. c) Construct the marginal cost schedule. d) Check that the gap between total cost and total variable cost is the same at all outputs Explain why:
Short-Run Cost Question2: Lisa has a lawm-mowing business Lisa hires students at $40 a day to mow lawns. Lisa leases5 lawn mowers for $200 a day. The table gives the daily output Total product (students per day) (lawns cut per day) Labor 0. 20 2. 44 70 94 4. 114 120 6. a) Construct the total variable cost and total cost schedules. Variable Costs = Cost Per Unit x Total Number of Units. b) Construct the average fixed cost, average variable cost, and average total cost schedules. c) Construct the marginal cost schedule. d) Check that the gap between total cost and total variable cost is the same at all outputs Explain why:
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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D9)
Transcribed Image Text:Short-Run Cost
Question2:
Lisa has a lawn-mowing business Lisa hires students at $40 a day to mow lawns. Lisa leases5
lawn mowers for $200 a day The table gives the daily output.
Labor
(students per day) (lawns cut per day)
Total product
20
2
44
70
94
14
4.
6
120
a) Construct the total variable cost and total cost schedules.
Variable Costs = Cost Per Unit x Total Number of Units.
b) Construct the average fixed cost, average variable cost, and average total cost schedules.
c) Construct the marginal cost schedule.
d) Check that the gap between total cost and total varnable cost is the same at all outputs
Explain why
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