Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 7, Problem 8MC
To determine
Diseconomies of scale.
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Chapter 7 Solutions
Managerial Economics: A Problem Solving Approach
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- MCQ: What do you understand by “diseconomies of scale”? Decrease in costs as we increase the number of workers but keep other factors fixed Increase in costs as we increase all factors of production by same proportion Decrease in output as we increase the number of workers but keep other factors fixed Decrease in costs as we increase all factors of production by same proportion Increase in costs as we increase the number of workers but keep other factors fixedarrow_forwardExplain every point with graph. 1. Economic and business cost . 2. Short run production analysis / law of variable proportion. 3. Short run cost analysis.arrow_forwardAt 76 units of labor, a firm finds that average product of labor equals 39.6 and marginal product of labor equals 42.9. We can conclude that the average product curve at 76 units of labor is:A)upward-sloping.B)downward-sloping.C)vertical.D)horizontal. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- 1. Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat? 2. Over what range of output is the farmer experiencing economies of scale? 3. Over what range of output is the farmer experiencing diseconomies of scale? 4. Which average total cost curve has the lowest possible average cost of production? 5. Which average total cost curve represents the largest plant?arrow_forwardIf producing more output increases average cost then a)there are diseconomies of scale. b)there are economies of scope. c)there are no economies of scale. d)there are diseconomies of scope.arrow_forwarda. What is true about output levels 350, 700, 1,050, 1,400, and 1,750?Choices below. (Economic capacity ,Maximum cost, Economies of Scale b. What is the right size of a plant to produce an output of 875? (Plant1,Plant 2, Palnt 3, Plant 4, Plant 5) c. Between what plant sizes does the firm experience economies of scale? (Between plant1 and 3 ,Between plant 3 and 4, Between plant 3 and 5)arrow_forward
- Which of the following results when an increase in all inputs results in a more-than-proportionate increase in output? Group of answer choices Diseconomies of scale Economies of scale Increasing returns to scale Constant returns to scalearrow_forwardMethod Units of Labor Units of Capital 1 50 10 2 20 40 3 10 70 A small company that shovels sidewalks and driveways has 100 homes to service for the winter. It can use various combinations of labor and capital: lots of labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. A summary of the methods is listed above. If hiring labor cost $100/unit and a unit of capital costs $400, what production method should be used? If labor cost increases to $200/unit what method should be chosen? You must show your calculations.arrow_forwarda)In your own words, state and briefly explain two reasons that lead to economies of scale. Approximately 100 words b)In your own words, state and briefly explain two reasons that lead to diseconomies of scale. Approximately 100 wordsarrow_forward
- Product Costs Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials $120,000 Direct labor 60,000 Variable overhead 25,000 Fixed overhead 220,000 Required: If required, round your answers to the nearest cent. 1. Calculate the prime cost per unit.$ per unit 2. Calculate the conversion cost per unit.$ per unit 3. Calculate the total variable cost per unit.$ per unit 4. Calculate the total product (manufacturing) cost per unit.$ per unit 5. What if the number of units increased to 55,000 and all unit variable costs stayed the same? indicate the impact on the following costs. a. Total direct materials increases by 10% b. Total direct labor increases by 10% c. Total variable overhead increases by 10% d. Total fixed overhead does not change no change e. Unit prime cost does not change no change f. Unit conversion cost decreases by less than 10% What would…arrow_forwardDescribe the two main types of internal diseconomies of scale?arrow_forwardWhich of the following results from bureaucratic red tape, breakdown of top-to-bottom communication, and poor decisions being made when the firm gets too large and long-run average costs increase? A.Diseconomies of scale B.Decreasing returns to scale C.Increasing returns to scale D.Constant returns to scalearrow_forward
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