Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Question
Chapter 9.8, Problem 1QQ
To determine
Short run average total cost .
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Output (Concession Stand Items)
Number of Workers Employed Per Day
Price of Labor Per Worker Per Day
Total Variable Cost of Labor
Total Fixed Costs Per Day
Total Cost Per Day
Average Price of Concession Stand Items
Total Revenue
Profit
Average Variable Cost
Average Fixed Cost
Average Total Cost
Marginal Cost
Marginal Revenue
0
0
$120
0
$2,000
2000
$8.00
0
-2000
0
0
0
0
8
100
2
$120
240
$2,000
2240
$8.00
800
-1640
2.40
20
22.40
2.40
8
400
4
$120
480
$2,000
2480
$8.00
3200
720
1.20
5
6.20
0.80
8
750
6
$120
720
$2,000
2720
$8.00
6000
3280
0.96
2.66
3.62
0.67
8
900
8
$120
960
$2,000
2960
$8.00
7200
4240
1.07
2.22
3.29
1.60
8
1,025
10
$120
1200
$2,000
3200
$8.00
8200
5000
1.17
1.95
3.12
1.92
8
1,125
12
$120
1440
$2,000
3440
$8.00
9000
5560
1.28
1.77
3.06
2.40…
Output (Concession Stand Items)
Number of Workers Employed Per Day
Price of Labor Per Worker Per Day
Total Variable Cost of Labor
Total Fixed Costs Per Day
Total Cost Per Day
Average Price of Concession Stand Items
Total Revenue
Profit
Average Variable Cost
Average Fixed Cost
Average Total Cost
Marginal Cost
Marginal Revenue
0
0
$120
0
$2,000
2000
$8.00
0
-2000
0
0
0
0
8
100
2
$120
240
$2,000
2240
$8.00
800
-1640
2.40
20
22.40
2.40
8
400
4
$120
480
$2,000
2480
$8.00
3200
720
1.20
5
6.20
0.80
8
750
6
$120
720
$2,000
2720
$8.00
6000
3280
0.96
2.66
3.62
0.67
8
900
8
$120
960
$2,000
2960
$8.00
7200
4240
1.07
2.22
3.29
1.60
8
1,025
10
$120
1200
$2,000
3200
$8.00
8200
5000
1.17
1.95
3.12
1.92
8
1,125
12
$120
1440
$2,000
3440
$8.00
9000
5560
1.28
1.77
3.06
2.40…
Output (Concession Stand Items)
Number of Workers Employed Per Day
Price of Labor Per Worker Per Day
Total Variable Cost of Labor
Total Fixed Costs Per Day
Total Cost Per Day
Average Price of Concession Stand Items
Total Revenue
Profit
Average Variable Cost
Average Fixed Cost
Average Total Cost
Marginal Cost
Marginal Revenue
0
0
$120
0
$2,000
2000
$8.00
0
-2000
0
0
0
0
8
100
2
$120
240
$2,000
2240
$8.00
800
-1640
2.40
20
22.40
2.40
8
400
4
$120
480
$2,000
2480
$8.00
3200
720
1.20
5
6.20
0.80
8
750
6
$120
720
$2,000
2720
$8.00
6000
3280
0.96
2.66
3.62
0.67
8
900
8
$120
960
$2,000
2960
$8.00
7200
4240
1.07
2.22
3.29
1.60
8
1,025
10
$120
1200
$2,000
3200
$8.00
8200
5000
1.17
1.95
3.12
1.92
8
1,125
12
$120
1440
$2,000
3440
$8.00
9000
5560
1.28
1.77
3.06
2.40…
Chapter 9 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 9.2 - Prob. 1QQCh. 9.2 - Prob. 2QQCh. 9.2 - Prob. 3QQCh. 9.2 - Prob. 4QQCh. 9.5 - Prob. 1QQCh. 9.5 - Prob. 2QQCh. 9.5 - Prob. 3QQCh. 9.5 - Prob. 4QQCh. 9.8 - Prob. 1QQCh. 9.8 - Prob. 2QQ
Ch. 9.8 - Prob. 3QQCh. 9.8 - Prob. 4QQCh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 1RQCh. 9 - Which of the following are short-run and which are...Ch. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4P
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- Q1:(A) Assume the following cost data are for a purely competitive producer: total product average fixed cost Average variable cost Average total cost Marginal cost 0    $45 1 $60 $45 $105 $40 2 $30 $42.5 $72.5 $35 3 $20 $40 $60 $30 4 $15 $37.5 $52.5 $35 5 $12 $37 $49 $40 6 $10 $37.5 $47.5 $45 7 $8.57 $38.57 $47.14 $55 8 $7.50 $40.63 $48.13 $65 9 $6.67 $43.33 $50 $75 10 $6 $46.50 $52.5   At a product price $56.will this firm produce in the short run? why or why not? if it is preferable to produce, what will be the profit maximizing or loss- minimizing output? explain what economic profits or loss will the firm realize per unit of output ? Use MR-MC approach also show economic profit graphically.arrow_forwardQUESTION 2 (a) Use the concepts of economies and diseconomies of scale to explain the shape of a firm’s long-run ATC curve. What is the concept of minimum efficient scale? What bearing can the shape of the long-run ATC curve have on the structure of an industry? (b) If a firm in monopoly maximizes revenue, does it automatically maximize profit too? Explain the content with relevant example and diagrams.arrow_forwardMeasures of Cost for Charlie's Chocolate Factory Quantity(Boxes of Chocolates) VariableCosts TotalCosts FixedCosts 0   $15 1 $1   2 $3 $18  3 $6 $21  4 $10   5  $30  6 $21  $15 What is the fixed cost of producing three boxes of chocolate?  Question 15 options:  $0  $1  $15  $18arrow_forward
- 40) When a decrease in the scale of production leads to higher average costs, the industry exhibitsA) diminishing returns. B) decreasing returns to scale.C) constant returns to scale. D) increasing returns to scale.arrow_forwardThe unlabeled red curves in this figure illustrate the: Â a. long-run average-total-cost curves of various firms constituting the industry. b. short-run average-total-cost curves of various firms constituting the industry. c. short-run average-total-cost curves of various plant sizes available to a particular firm. d. short-run marginal-cost curves of various plant sizes available to a particular firm.arrow_forwardIn U-Shaped Average Total Cost Curve above Section 11.4 exhibit 2, why does AFC continue to fall even while ATC rises at very high output?arrow_forward
- Price (dollars per packet of chips) Quantity demanded (millions of packets of chips per year) Quantity supplied (millions of packets of chips per year) 4 135 26 5 104 53 6 81 81 7 68 98 8 53 110 9 39 121   C: Harry-Chips is a firm in the potato chips industry. Harry-Chips produces 10 million packets of chips per year at an average total cost (ATC) of $4. What is Harry-Chips short-run profit or loss per year? Explain your answer in detail.   D: Given your answer in part d, would new firms enter or existing firms exit the market? What would be the long-run impact on Harry-Chips’ profit or loss? Explain in detail.arrow_forwardExplain the industry structure with graph and discuss the reasons for economics of scale and diseconomies of scalearrow_forwardQuestion 4. (a) Explain the concept of economies of scale. Explain how an organisation such as Starbucks would realise economies of scale in its business operations (use examples to support your answer)(b) Wages are lower in the Middle East than in Australia. Explain how this fact will make Starbucks average cost and marginal cost curves different in its Middle East cafés compared to its Australian cafesarrow_forward
- Klee Motors is a small car leadership. On average, it sells a car for $24 000, which it purchases from their manufacturer for $20 000. Each month, Klee Motors pay $60 000 in rent and utilities and $60 000 in sales people's salaries. In addition to their salaries, sales people are paid a commission of $500 for each car they sell. Klee Motor also spends $15 000 each month on local advertisements. How many cars must Klee Motors sell each month to break even? Will Klee Motors earn a profit if it can sell 6 cars? How much sales revenue shall the company earn to achieve a $100 000 profit?arrow_forwardDraw a standard long-run average cost curve. Identify on the graph and define economies of scale (or increasing returns to scale), constant returns to scale, and diseconomies of scale (or decreasing returns to scale). Also identify and define the minimum efficient scale (MES). How does the relationship between MES and the market demand affect the structure of an industry? Specifically, how does this relationship affect the equilibrium number of competitors in a market?arrow_forwardExplain how the Average Total Cost curve is derived for a competitive firm in the long-run. Also, explain what is economies of scale.arrow_forward
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