LSC CUMBERLAND EC202 MICRO>PKG<
21st Edition
ISBN: 9781260586992
Author: McConnell
Publisher: MCG
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Question
Chapter 10, Problem 7DQ
To determine
Shut down point in the short run.
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7. Long-run cost relationships
The following graph shows the short-run average total cost curves and the long-run average cost curve for a publishing firm. The five marked
quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average cost curve (LRAC); for
example, Q₁ marks the point of tangency between SRATC₁ and LRAC.
The orange point on SRATC3 indicates the firm's current output level in the short run (Q3).
COST PER UNIT
SRATC₁
LRAC
SRATC2
|
"
Q₂2₂
SRATC3
O
"
|
1
1
Q3
QUANTITY OF OUTPUT
Q₁
SRATC5
SRATC4
1
The table below shows cost data for WipeOutSki Company which manufactures skis for beginners. If the
company's fixed costs are $30, what is the marginal cost of five units of output?
Variable
Cost
Fixed
Cost
Total
Cost
Average Variable
Cost
Average Total
Cost
Marginal
Cost
Quantity
$30
1
$10
$30
$25
$30
$45
$30
$70
$30
$100
$30
B.
$135
$30
O $45.00
O S30.00
O S25.00
2)
3.
4)
69
The following graph shows the short-run average total cost curves and the long-run average cost curve for a publishing firm. The five marked quantities
indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average cost curve (LRAC); for example,
Q₁ marks the point of tangency between SRATC₁ and LRAC.
The orange point on SRATC3 indicates the firm's current output level in the short run (Q3).
COST PER UNIT
SRATC₁
LRAC
SRATC₂
Q₁ Q₂
SRATC3
24
QUANTITY OF OUTPUT
SRATC5
SRATC4
|
1
Q5
<
Chapter 10 Solutions
LSC CUMBERLAND EC202 MICRO>PKG<
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