Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

Question

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Answer 1

Question

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

(d)

To determine

Identify what law is not operative for this firm.

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Find the value of A,B,C,D & E. Add $8 with FC. New FC=$10, now assuming quantity and variable cost remain the same, Create a new table and find the value of TC,AFC,AVC,ATC and; MC.

For this Short Run firms costs, explain the SHAPE of each curve: MC, ATC and AVC. Where would the AFC be located and why?

Ball Bearings, Inc. faces costs of production as follows:Table 1: Ball Bearing Inc. Production CostsQuantity Total Fixed Cost Total Variable Cost0 100 01 100 502 100 703 100 904 100 1405 100 2006 100 360(a.) Calculate the company’s average fixed costs, average variable costs, average total costs, and marginal costsat each level of production.(b.) The price of a case of ball bearings is 50. Seeing that she can’t make a profit, the Chief Executive Officer(CEO) decides to shut down operations. What are the firm’s profits/ losses? Was this a wise decision?Explain.(c.) Vaguely remembering his introductory economics course, the Chief Financial Officer tells the CEO it isbetter to produce 1 case of ball bearings, because marginal revenue equals marginal cost at that quantity.

Answer 2

Question

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

(d)

To determine

Identify what law is not operative for this firm.

Expert Solution & Answer

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Answer 3

Question

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

(d)

To determine

Identify what law is not operative for this firm.

Expert Solution & Answer

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Answer 4

Question

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

(d)

To determine

Identify what law is not operative for this firm.

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Answer 5

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

(d)

To determine

Identify what law is not operative for this firm.

Answer 6

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

Answer 7

Chapter 11, Problem 18QE

(a)

To determine

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

Answer 8

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

Answer 9

(b)

To determine

Graphically illustrate the AFC, ATC, AVC, and MC curves.

Answer 10

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

Answer 11

(c)

To determine

Explain the shape of the AFC, AVC, ATC, and MC curves.

Answer 12

(d)

To determine

Identify what law is not operative for this firm.

Answer 13

(d)

To determine

Identify what law is not operative for this firm.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 11.1 - Prob. 1Q Ch. 11.1 - Prob. 2Q Ch. 11.1 - Prob. 3Q Ch. 11.1 - Prob. 4Q Ch. 11.1 - Prob. 5Q Ch. 11.1 - Prob. 6Q Ch. 11.1 - Prob. 7Q Ch. 11.1 - Prob. 8Q Ch. 11.1 - Prob. 9Q Ch. 11.1 - Prob. 10Q

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

Solution Summary: The author illustrates the AFC, variable cost, AVC, and MC curves using Table 1.

Determine the average fixed cost (AFC), variable cost (VC), average variable cost (AVC), and marginal cost (MC).

Graphically illustrate the AFC, ATC, AVC, and MC curves.

Explain the shape of the AFC, AVC, ATC, and MC curves.

Identify what law is not operative for this firm.

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Chapter 11 Solutions