Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
9th Edition
ISBN: 9780134143071
Author: PINDYCK, Robert, Rubinfeld, Daniel
Publisher: PEARSON
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Question
Chapter 8, Problem 7E
(a)
To determine
Identify the variable cost (VC), fixed cost (FC), average cost (AC),
(b)
To determine
Graphical representation of the average cost, marginal cost, and average variable cost curves.
(c)
To determine
Identify the output level that minimizes the average cost.
(d)
To determine
Identify the
(e)
To determine
Identify the price level that the firm earns a negative profit.
(f)
To determine
Identify the price level that the firm earns a positive profit.
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Students have asked these similar questions
Suppose a firm faces a cost function of C = 8 + 4q + q^2, so that its marginal cost is
MC=4 + 2q.
a) What is the firm's fixed cost. F?
b) What is the formula for the firm's variable cost (VC), Average Cost (AC), and Average Variable Cost (AVC)?
c) On a diagram, draw the AC, AVC, and MC curves.
The total cost function of a firm producing Jeans is TC = 0.5Q3− 15Q2 + 175Q + 100, where Q is output.
a.What are the total variable cost (TVC) and the total fixed cost (TFC) in this case?
b.The average cost is given by AC = TC/Q, the average variable cost is AVC = TVC/Q and the average fixed cost is AFC = TFC/Q. Find the AC, AVC and AFC functions.
c. If the marginal cost is MC = 3(0.5)Q2 - 2(15)Q + 175, then roughly sketch the graph of MC, AVC and AC (If you know how to use Excel, then you can get more accurate graphs). What relationship do you observe between the three cost curves?
Which of the following statements is (are) correct?
(x) In the short run, if a firm produces nothing, then, by definition, fixed costs will equal zero.
(y) Fixed costs can be defined as costs that are incurred even if nothing is produced.
(z) Although fixed costs do not vary as a firm varies the output amount that it produces, average fixed costs
for the firm do vary as the amount of output varies.
(x), (y) and (z)
(x) and (y) only
(x) and (z) only
(y) and (z) only
(z) only
Chapter 8 Solutions
Myeconlab With Pearson Etext -- Access Card -- For Microeconomics
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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Similar questions
- Which of the following is correct if the firm described in Figure 7-4 decides to produce nothing? a. Total cost will be zero. b. Total fixed cost will be zero. c. Total variable cost will be zero. d. Average cost will be zero. e. It is impossible for the firm to produce nothing in the short run.arrow_forwardAnswer the following under the assumption that the firm has increasing marginal costs: The long-run average cost curve is.... If marginal cost is equal to average cost, the average cost at this point must be... As a firm increases output, long-run average costs typically....arrow_forwardA firm with fixed costs produces at the lowest point on its U-shaped average variable cost curve. If it raises output by 1 unit, then average: A) Total cost will be less than average variable cost B) Fixed cost will necessarily be below average variable cost C) Total cost will decrease D) Fixed cost will increase Please explainarrow_forward
- Where Q = quantity, TC = total cost, TFC = total fixed cost, and TVC = total variable cost; average variable cost, or “AVC” is equal to: A) TFC/Q B) Q/TFC C) Q/TVC D) TVC/Qarrow_forwardSuppose a firm has following total cost function: TC=(2Q+4)(Q+3)+240. Find the fixed cost (FC), total variable cost (TVC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC) for this firm.arrow_forwardThe cost function of a firm is c(y) = 3y^2 + 6y + 5.1. Find the Average variable and Marginal Cost curves of the firm.2. What is the quantity level where the average variable cost is minimized?arrow_forward
- Q4) A firm’s short-run cost function is C(q) = 100q - 5q2 + 0.3q3 + 400. a) Determine the fixed cost, F; the variable Cost, VC b) The average fixed cost AFC, the average variable cost, AVC; the average total cost, AC c) the marginal cost, MC d) If q= 10 find FC,VC, AFC, AVC, ATC and MCarrow_forwardWhich statement is true? Fixed costs a.do NOT exist in the long run. b.depend on the firm's level of output. c.are zero if the firm is producing nothing. d.are the difference between total costs and average variable costs.arrow_forwardBob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's variable costs? Question 5 options: All other answers are incorrect They are $25 per lawn They are $27 per lawn We do not have enough information to know the exact structure of variable costs at quantities other than 10 lawns.arrow_forward
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