Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 22, Problem 17E
To determine
To illustrate:
The graphical representation of marginal and average cost curves.
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When you calculate marginal costs, they should include:
SELECT THE CORRECT ANSWER
A.the market price of the product.
B.only variable costs.
C.both the variable and fixed costs.
D.only fixed costs.
In the ice cream industry, in the short run, what cost includes the cost of cream and sugar, but not the cost of the factory. Choose all answers that are correct.
a.Marginal cost
b.Variable cost
c.Fixed cost
d.Average total cost
The total cost changes from 92 to 122 and the quantity changes from 1 to 2
Calculate the value of marginal cost
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Marty used to be a bartender making $5,000 a year but he quit in order to become a clown that does shows at birthday parties. His clown car and costumes cost $7,000 and he did a lot of shows in the past year, making $13,000 in revenue but paying $2,000 in variable costs for balloons, gas, etc. Marty asked an accountant and an economist to calculate his profit. What did they report?arrow_forwardA producer borrows money and start a business . He himself looks after the business. Identify the explicit and implicit costs from this information. Please write the answer in brief.arrow_forwardThree college students are considering operating a tutoring business in economics. This business would require that they give up their current jobs at the stu- dent recreation center, which pay $6,000 per year. A fully equipped facility can be leased at a cost of $8,000 per year. Additional costs are $1,000 a year a. What are fixed costs?b. What are variable costs? c. What is the marginal cost?arrow_forward
- In the long run, fixed costs arearrow_forwardA manufacturing firm has a total cost curve : TC= 0.25Q^3 - 6Q^2 + 50Q + 240, and a marginal cost curve of MC = 0.75Q^2 -12Q + 50. Calculate the minimum cost that the firm can possibly have.arrow_forwardThe 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 X? Quantity Variable Cost Fixed Cost Total Cost Average Variable Cost Average Total Cost Marginal Cost 0 0 $30 1 $10 $30 2 $25 $30 X 3 $45 $30 4 $70 $30 5 $100 $30 6 $135 $30 Group of answer choices $15 $55 $5arrow_forward
- Your company paid a corporate spy to find out the short-run cost of a competitor. The spy obtained the information below on your competitor's quantities, total variable cost, and total cost. An X appears in place of numbers the spy failed to get. Your boss asks you to calculate some of the information the spy was not able to obtain. Fill in the blanks below with the missing information. Output quantity Total variable cost Total cost 0 $0 $250 25 450 50 300 X 75 375 100 600 850 125 X 1125 150 1200 X 175 1875 200 2000 2250arrow_forwardWhen the marginal cost is lesser than the average cost the firm is producing in which Answers: A. The average cost is decreasing. B. The total cost is decreasing. C. The average cost is increasing. D. The marginal cost is decreasing.arrow_forwardYou run a game-day shuttle service for parking services for the local ball club. Suppose you are compensated $20 per customer, per ride. In other words, your marginal revenue is $20. Your costs for different customer loads are summarized in the following table. For each customer load, calculate both the marginal cost and the average cost. Then answer the question that follows. Note: Round your answers to the nearest cent. Customers Total Cost Marginal Cost Average Cost ($) ($ per customer) ($ per customer) 1 $30 2 $35 3 $45 4 $60 5 $80 6 $105 7 $135 8 $170 In order to maximize profits, you should carry _____ customers per load.arrow_forward
- Variable costs are sunk costs. costs that change every day. costs that change with the level of production.arrow_forwardWhich type of cost does depend on a firm's output? 1.marginal cost 2.total cost 3.variable cost 4.all of the abovearrow_forwardUse Excel to show formulas used Amazing is evaluating three locations for a second headquarters. Costs for construction at location A are $18,900,000, Location B are $21,700,000 and Location C are $23,300,000. Variable costs for Location A are $16, Location B are $14 and Location C are $12. The company plans to sell products for $27. Create a cost-volume graph that shows cost lines for all three options through 2,000,000 units.arrow_forward
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