Which statement is correct?Choose an answerO 1. The average fixed costs increase with the production volume.O 2. The average total costs are minimal when the average fixed costs are equal to the averagevariable costs.O 3. In the long term, it pays to maintain production operations as soon as a positivecontribution margin is generated.O 4. The operating optimum is where the marginal costs intersect the average variable costs.O 5. As long as the marginal costs are below the average total costs, theaverage total cost.

In long term, the price must be higher than the average cost that means contribution margin must be…

Answered: Which statement is correct? Choose an…

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 4MC

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1. The amount of fixed factory costs applied to the product during the first 6 months under absorption costing is? A. Over-applied by $20,000. C. Under-applied by $40,000. B.Equal to the fixed costs incurred. D. Under-applied by $80,000. 2. Reported net income (or loss) for the first 6 months under absorption costing is? A. $160,000 B. $0 C. $40,000 D. $(40,000) 3. Reported net income (or loss) for the first 6 months under variable costing is? A. $180,000 B. $40,000 C. $0 D. $(180,000)
Only typed answer and don't use chat gpt and please answer correctly Suppose that you can sell as much of a product (in integer units) as you like at $61 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC=9q This means that each unit costs more to produce than the previous one (e.g., the first unit costs 9*1, the second unit (by itself) costs 9*2, etc.). If fixed costs are $50, what is the optimal output level? Please specify your answer as an integer. Also, assume that a competitive firm has the total cost function: TC = 1q3 - 40q2 + 710q + 1700 Suppose the price of the firm's output (sold in integer units) is $550 per unit. Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level? Please specify your answer as an integer.
tc=1500+15q+6q^2+q^3 1=the total fix cost at 1000 and 500 units of output? 2=the total variable cost,average cost and marginal cost at 50 units of output.
665 Capital (K) 0 10 Labor (L) O $13.30 O $1.95 O $10.19 O $6.34 317 Please refer to the graph above. Assume that cost is $4,216. What is the capital rental rate? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.
Kindly assist on question 1 and 2 1The difference between zero accounting profit and zero economic profit is that. a) an economic profit of zero indicates a fair return because it includes the opportunity cost of a firms capital. b) an economic profit zero indicates unacceptable rate of return because it does not include the opportunity cost of a firms capital. c) an economic profit of zero indicates more than a fair return because it includes opportunity cost and explicit cost. d) an accounting profit of zero indicates a fair rate of return because it includes the opportunity cost of a firms capital. 2.If a corporation is sued and losses the lawsuit, it's liability to pay. a) is imposed on all stockholders, personally b) is imposed only on the corporate CEO and the board of directors. C) its limited to the assets held in the corporations name. d) is imposed on the bondholders of the corporation
Answer the following questions on the basis of this information for a single fifirm: total cost of capital = $1000; price paid for labor = $12 per labor unit; price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5000 units of output by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5000 units of output?b. Now assume the firm improves its production process so that it can produce 6000 units of output by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average cost of producing the 6000 units of output?c. Refer to your answers to 8a and 8b and explain how process innovation can improve economic efficiency.
Karen runs a print shop that makes posters for large companies. It is a very competitive business. The market price is currently $1 per poster. She has fixed costs of $250. Her variable costs are $1,000 for the first thousand posters, $800 for the second thousand, and then $750 for each additional thousand posters. What is her AFC per poster (not per thousand!) if she prints 1,000 posters? 2,000? 10,000? What is her ATC per poster if she prints 1,000? 2,000? 10,000? If the market price fell to 70 cents per poster, would there be any output level at which Karen would not shut down production immediately?
Refer to the table below. Quantity Cost (in dollars) Fixed Costs (in dollars) Total Costs (in dollars) Average Total Costs (in dollars per unit) Average Variable Costs (in dollars per unit) Marginal Costs (in dollars per unit) 0 0 40 40 - - - - - - 1 15 40 55 55 15 15 2 35 40 75 37.5 17.5 20 3 60 40 100 33.3 20 25 4 90 40 130 32.5 22.5 30 5 125 40 165 33 25 35 6 160 40 200 33.3 26.6 40 If this information were used to create a total cost graph, the curve should Question 6 options: begin at 40 on the vertical axis and slope upward. become steeper as quantity increases. become steeper due to diminishing returns. reflect all of the above.
For LG Company, the total cost of producing 200 refrigerators is R.O 48,000. When the company produced one more refrigerator, the total costs increased to R.O 48,250. What is the marginal cost of production here? a. R.O 200 b. R.O 180 c. R.O 230 d. R.O 250
a. Why will firms in most markets be located at or close to the bottom of the longrun average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to havepositive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale andconstant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to shortrun cost curves?
Q44. Suppose that cellphone batteries can be produce using 3 different types of technologies. The table below indicates the total cost related to each technology for the amount of output produced per day. a. Samsung is considering which technology to adopt to produce its cellphone batteries. Use the information to find the average-total-cost of each technology and identify the most efficient choice of technology and plant size if Samsung would like to produce 6 batteries. b. In general, where must the marginal cost curve intersect the average total cost curve?
3. The fixed costs incurred by a small genetics research lab are $200,000 per year. Variable costs are $12,500 per research project.a. If the revenue per project is $30,000, what is the breakeven number of projects of this lab in a year to sustain its operations?b. Currently, the lab works on 20 projects a year. What is their profit at this level?c. If variable costs increase to $13,000 per research project, what is the new BEP? By how much will their profit increase or decrease?

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