MyLab Economics with Pearson eText -- Access Card -- for Economics
6th Edition
ISBN: 9780134124377
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 12, Problem 12.4.5PA
Subpart (a):
To determine
The Average Variable cost , Average Fixed cost, Average Total cost and Marginal cost.
Subpart (b):
To determine
The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.
Subpart (c):
To determine
The Average Variable cost, Average Fixed cost, Average Total cost and Marginal cost.
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Check out a sample textbook solutionStudents have asked these similar questions
Ed produces table lamps in the perfectly competitive desk lamp market.
Fill in the missing values in the following table
Suppose the equilibrium price in the desk lamp market is $50. How many table lamps should Ed produce, and how much profit will he make?
If next week the equilibrium price of desk lamps drops to $30, should Ed shut down? Explain.
Output / Week
Total Cost
AFC
AVC
ATC
MC
0
$100
1
$150
2
$175
3
$190
4
$210
5
$240
6
$280
7
$330
8
$390
9
$460
10
$540
The market for which product best fits the definitionof a perfectly competitive market?a. eggsb. tap waterc. moviesd. computer operating systems
Assume hotdog stands in New York are in a perfectly competitive market. Jacob is taking over a hot dog stand from his uncle. Let’s say initially it is the only hotdog stand in three blocks. Currently he charges a price of $5 a hotdog and sell about 100 hotdogs every day. His uncle left to cart to him, but he still has to pay a $18,250 a year for an inspection and permit (think this as rent). For 100 dogs, it costs him $100 a day in ingredients and $50 a day in propane to grill.
What is Jacob’s average fixed cost (per day)? What is his variable cost (per day)? And finally, what is his average total cost (per day)?
In side-by-side graphs please illustrate what the market for hotdogs looks like as a whole and for your individual stand. Be sure to label everything.
c. How much profit are you earning? Calculate it and show it on the graph.
d. Now imagine, others are realizing Jacob’s success and start filling up the empty street corners with their hotdogs. In a new…
Chapter 12 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Economics
Ch. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PACh. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.2.1RQCh. 12 - Prob. 12.2.2RQ
Ch. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4PACh. 12 - Prob. 12.2.5PACh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3PACh. 12 - Prob. 12.3.4PACh. 12 - Prob. 12.3.5PACh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.5.7PACh. 12 - Prob. 12.5.8PACh. 12 - Prob. 12.5.9PACh. 12 - Prob. 12.5.10PACh. 12 - Prob. 12.5.11PACh. 12 - Prob. 12.5.12PACh. 12 - Prob. 12.5.13PACh. 12 - Prob. 12.5.14PACh. 12 - Prob. 12.6.1RQCh. 12 - Prob. 12.6.2RQCh. 12 - Prob. 12.6.3RQCh. 12 - Prob. 12.6.4PACh. 12 - Prob. 12.6.5PACh. 12 - Prob. 12.6.6PACh. 12 - Prob. 12.6.7PACh. 12 - Prob. 12.6.8PACh. 12 - Prob. 12.6.9PACh. 12 - Prob. 12.6.10PA
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Similar questions
- What price will a perfectly competitive firm end up charging up the long run? Why?arrow_forwardAssume hotdog stands in New York are in a perfectly competitive market. Jacob is taking over a hot dog stand from his uncle. Let’s say initially it is the only hotdog stand in three blocks. Currently he charges a price of $5 a hotdog and sell about 100 hotdogs every day. His uncle left to cart to him, but he still has to pay a $18,250 a year for an inspection and permit (think this as rent). For 100 dogs, it costs him $100 a day in ingredients and $50 a day in propane to grill. a. What is Jacob’s average fixed cost (per day)? What is his variable cost (per day)? And finally, what is his average total cost (per day)? b. In side-by-side graphs please illustrate what the market for hotdogs looks like as a whole and for your individual stand. Be sure to label everything. c. How much profit are you earning? Calculate it and show it on the graph. d. Now imagine, others are realizing Jacob’s success and start filling up the empty street corners with their hotdogs. In a new side-by-side graph…arrow_forwardYou read in a business magazine that farmers are reaping high profits. With the theory of perfect competition in mind, what do you expect to happen over time (in the long run) to each of the following? a. The prices of agricultural products how will this affect the market equilibrium price of the agricultural products? Will it remain the same, increase or decrease?arrow_forward
- Assume that apples are produced in a perfectly competitive market. Columbia’s Orchard is a typical firm that grows and sells apples. Currently, Columbia earns zero economic profit, and the market price of apples is $10 per basket. b. Suppose an increase in the popularity of apple, the demand for apple increases. How will the increase in the demand for apples affect Columbia’s economic profit in the short run? Explain. Answer: c. What will happen to Columbia’s economic profit in the long run? Explain.arrow_forwardPretzel stands in New York City are a perfectly competitive industry in long-runequilibrium. One day, the city starts imposing a $100 per month tax on each stand.How does this policy affect the number of pretzels consumed in the short run and thelong run?a. down in the short run, no change in the long runb. up in the short run, no change in the long runc. no change in the short run, down in the long rund. no change in the short run, up in the long runarrow_forward31. Which of the following is the best example of a perfectly competitive market? a. soft drinks b. farm products c. diamonds d. athletic shoesarrow_forward
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