EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
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Question
Chapter 11, Problem 28APA
a)
To determine
Long and short run decisions.
b)
To determine
Economies of scale.
c)
To determine
Long run average cost
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4. Various measures of cost
Suppose the imaginary company of Panthera is a small, Reno-based American apparel manufacturer specializing in athleisure. The following table
presents the brand's total cost of production at several different quantities.
Fill in the remaining cells of the following table.
Quantity Total Cost Marginal Cost Fixed Cost Variable Cost
(Pairs) (Dollars) (Dollars)
(Dollars)
(Dollars)
0
1
2
3
4
01
5
6
60
160
220
270
340
450
630
000000
Average Variable Cost Average Total Cost
(Dollars per pair)
(Dollars per pair)
On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable
(AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint:
ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $160, so you should start your ATC curve by
placing a green point at…
E4
Ebba Kantzen says the following:
"I am currently producing 10,000 pizzas per month at a total cost of $50,000. If I produce 10,001
pizzas, my total cost will rise to $50,011. Therefore, my marginal cost of producing pizzas must
be increasing."
(
1.) Using the point drawing tool, indicate the point of marginal cost. Label this point "Marginal
cost."
2.) Using the point drawing tool, indicate the point of average total cost. Label this point "Average
total cost."
Carefully follow the instructions above, and only draw the required objects.
Costs(dollars per pizza)
(5.95,0)
MC
Quantity (pizzas per month)
points
ATC
Chapter 11 Solutions
EBK ECONOMICS
Ch. 11.1 - Prob. 1RQCh. 11.1 - Prob. 2RQCh. 11.2 - Prob. 1RQCh. 11.2 - Prob. 2RQCh. 11.2 - Prob. 3RQCh. 11.3 - Prob. 1RQCh. 11.3 - Prob. 2RQCh. 11.3 - Prob. 3RQCh. 11.3 - Prob. 4RQCh. 11.3 - Prob. 5RQ
Ch. 11.4 - Prob. 1RQCh. 11.4 - Prob. 2RQCh. 11.4 - Prob. 3RQCh. 11.4 - Prob. 4RQCh. 11.4 - Prob. 5RQCh. 11 - Prob. 1SPACh. 11 - Prob. 2SPACh. 11 - Prob. 3SPACh. 11 - Prob. 4SPACh. 11 - Prob. 5SPACh. 11 - Prob. 6SPACh. 11 - Prob. 7SPACh. 11 - Prob. 8SPACh. 11 - Prob. 9SPACh. 11 - Prob. 10SPACh. 11 - Prob. 11SPACh. 11 - Prob. 12SPACh. 11 - Prob. 13SPACh. 11 - Prob. 14SPACh. 11 - Prob. 15APACh. 11 - Prob. 16APACh. 11 - Prob. 17APACh. 11 - Prob. 18APACh. 11 - Prob. 19APACh. 11 - Prob. 20APACh. 11 - Prob. 21APACh. 11 - Prob. 22APACh. 11 - Prob. 23APACh. 11 - Prob. 24APACh. 11 - Prob. 25APACh. 11 - Prob. 26APACh. 11 - Prob. 27APACh. 11 - Prob. 28APACh. 11 - Prob. 29APACh. 11 - Prob. 30APACh. 11 - Prob. 31APACh. 11 - Prob. 32APA
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- Suppose the imaginary company of Panthera is a small, Raleigh-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost (Pairs) (Dollars) Marginal Cost (Dollars) Fixed Cost Variable Cost (Dollars) (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) 0 120 1 210 2 270 3 315 4 380 475 6 630arrow_forwardIn this week’s journal entry, you are asked to reflect on the concept of economies of scale. There are many ways to define economies of scale, but the most straightforward explanation is as follows: The more you make of something, the less it costs. Walmart is truly a behemoth in the retail industry; aside from Amazon, there are few competitors that have become such dominant forces in the marketplace. How might economies of scale pose a threat to existing smaller competitors? Look around your own community. Has Walmart had an impact on smaller businesses in your area? https://sway.office.com/yw6F8tEDRmKwGA6G?ref=Linkarrow_forwardE1 On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol) AVC, plot the pointn on the integer; for example, the ATC of producing one pair of boots is $210, so you should start your ATC curve by placing a green point at (1, 210). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $90, so you should start your MC curve by placing an orange square at (0.5, 90).)arrow_forward
- Suppose your dad owns a voodworking shop where he makes handmade benches. The following graph shows the marginal cost (MC) and average variable cost (AVC) for your dad's business. 100 90 80 MC 70 60 AVC 50 40 30 20 10 10 20 30 40 50 60 70 80 90 100 OUTPUT (Benohes per month) For each of the prices in the following table, use the graph to determine the number of benches your dad would produce in order to maximize his profit. Also, for each of the prices, indicate whether the firm will produce or shut down (or be indifferent between the two) in the short run. Price Output (Dollars per bench) (Benchs per month) Produce or Shut Down? 32 36 42 55 66 76 COST (D olars per bench)arrow_forwardThe United Kingdom started regulating the size of grocery stores in the early 1990s, and today, the average size of a typical UK grocery store is roughly half the size of a typical U.S. store and two-thirds the size of a typical French store (Haskel and Sadun, 2011). What implications would such a restriction on size have on a store's average costs. Discuss in terms of economics of scale and scope. OA. Grocery store size does not affect the long-run average cost of production if there are economies of scale. B. Grocery store size does not affect the long-run average cost of production if there are diseconomies of scale c. The long-run average cost of production for U.K. grocery stores is lower if there are diseconomics of scale Oo. The long-run average cost of production for U.K. grocery stores is higher if there are diseconomics of scale. OE. The long-run average cost of production for U.K. grocery stores is higher if there are no economies of scale Assume smaller grocery stores…arrow_forwardThe following table gives you information on the total cost of Mac’s ice cream production: b. Compute the average total cost at each level of output. c. Compute the marginal cost at each level of output. d. At which level of output does the average total cost start increasing? Explain the increasing average total cost and its relationship with the marginal cost.arrow_forward
- Please see the attached two pictures, one for the graph, and the other for the questions.arrow_forwardSee attached pictures for the question.arrow_forwardJane's Juice Bar has the following cost schedules: In the following table, complete the marginal cost, average variable cost, and average total cost columns. Quantity Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost (Vats of juice) (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 0 30 1 5 35 2 15 45 3 30 60 4 50 80 5 75 105 6 105 135 On the following graph, use the orange points (square symbol) to plot the marginal-cost curve for Jane's Juice Bar. (Note: Be sure to plot from left to right and to plot between integers. For example, if the marginal cost of increasing production from 1 vat of juice to 2 vats of juice is $5, then you would plot a point at (1.5, 5).) Then use the purple points (diamond symbol) to plot the average-variable cost curve starting at 1 vat of juice, and use the green points…arrow_forward
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