Foundations of Economics - With MyEconLab
8th Edition
ISBN: 9780134641720
Author: BADE
Publisher: PEARSON
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Chapter 14, Problem 9SPPA
To determine
To explain:
The change in cost curves of retailers if cost-saving self-checkouts is introduced with the help of a graph.
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Students have asked these similar questions
Use the table to answer the uestion below:
Quantity Total Cost
0 10
1 23
2 32
3 40
4 55
Calculate average fixed cost if 4 units are produced?
Charlie Co. sells pastries and its production and cost table is given below. A worker costs $100 a day, the firm has fixed costs of $200.
L
Q
MP
MC
TC
ATC
0
0
1
20
2
50
3
90
4
120
5
140
6
150
7
155
Complete the table
Compare the average total cost and the marginal cost and explain the relationship
Describe the methods that can be used to determine where profit is maximized?
A special shoe manufacturer ABC Co. has costs of production as follows and solve all the subparts:
Quantity 0 1 2 3 4 5 6
Total Variable Cost ($) 0 50 70 90 140 200 360
ABC Co.’s fixed costs are $100. Calculate average fixed costs, average variable costs, average total costs and marginal costs at each level of production.
Draw the company’s cost curves in a clearly labelled graph.
The price of ABC shoe is $50. What are the company’s profits? In case of loss, should the CEO continue operations or decide to shut-down? Which would be a wise decision? Explain.
The chief financial officer tells the CEO that it’s better to produce only one shoe this month. What could be the reason for this advice by the CFO? What are the firm’s profits at that level of production? Is this the best decision? Explain.
Chapter 14 Solutions
Foundations of Economics - With MyEconLab
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Similar questions
- Morgan took $400 000 out of their savings account to start an ice cream stand. The savings account paid 5% interest. In the first year, Morgan sold 12,000 batches of ice cream at a price of $3 each, and incurred costs of $12,000 which involved outlays of money. What was Morgan’s economic profit in the first year?arrow_forwardAsap Total cost can be divided into two types. What are those two types? Select one: a. fixed costs and average costs b. fixed costs and variable costs c. average costs and marginal costs d. fixed costs and marginal costsarrow_forwardMention and explain the cost components certainly do not exist in the long run?arrow_forward
- Q: A farmer plane to harvest maize on his specific land. Discuss all factors of production whichhe need to harvest the whole season of crop. Also mentioned their rewards. Differentiate between economic profit and accounting profit, implicit explicit cost, total cost, variable cost, & average cost?arrow_forwardFarmer McDonald's gives banjo lessons for $20 an hour. One day, He spends 10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred? what cost with his account in Measure? If these seeds yield $200 worth of crops, Does McDonald earn an accounting profitarrow_forwardFarmer McDonald gives banjo lessons for $20 an hour. One day, he spends10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred?What cost would his accountant measure? If these seeds yield $200 worth of crops, doesMcDonald earn an accounting profit? Does he earn an economic profit?arrow_forward
- Graphs must display The Marginal Cost Curve is shaped like a Nike swoosh. The Marginal Cost Curve crosses the Average Total Cost curve and Average Variable Cost curves at the lowest pointarrow_forwardMegan’s Snow Shoveling Service, in which Megan is the only employee, has the following cost schedule. Quantity(sidewalks shoveled per day) Variable Cost Total Cost AVC ATC MC 0 $0 $30 - - - 1 10 40 2 25 55 3 45 75 4 70 100 5 100 130 6 135 165 Calculate average variable cost, average total cost, and marginal cost for each quantity and graph all three curves.arrow_forwardBall 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.arrow_forward
- Problem 2: Average total cost, from “Principles of Economics” by N. Gregory MankiwYou are the chief financial officer for a firm that sells gaming consoles. Your firm has thefollowing average-total-cost schedule:Quantity | Average total cost600 $300601 $301Your current level of production is 600 consoles, all of which have been sold. Someone calls, desperateto buy one of your consoles. The caller offers you $550 for it. Should you accept the offer? Why or whynot?arrow_forwardIf marginal cost is decreasing, what is happening to an average variable cost (decreasing, increasing) Note : don't use chat gptarrow_forwardWrite down the average cost and marginal cost. Find the value of Q whichminimizes average cost? (Show necessary and sufficient conditons)arrow_forward
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