Chapter 22 Supply: The Costs of Doing Business Why does the minimum point of the average-total-cont curve show the quantity at which the firm in most eff ciently supplying output in the short run! II. Consider a firm with a fixed-size production facility as described by its existing cost curves. Explain what would happen to those cost curves mandatory health insurance program were imposed & What are variable costs What is the marginal cont on all firms. d. How many student hours would it take to break event What 15. Express Mall offers overnight delivery to whether required the firm to provide a health insurance pro gram for each employee worth 10 percent of the employee's salary! How would that plan compare to one that requires each firm to provide a $100.000 group program that would cover all employees in the firm, no matter what the number of employees was? is attempting to come to some conclusion on to expand its facilities. Currently its fixed costs are $2 million per month, and its variable costs are $2 per package. It charges $12 per package and has a monthly volume of 2 million packages. If it expands its fixed costs will rise by $1 million and its variable costs will fall to $1.50 per package. Should it expand? 16. Suppose the cost of starting Business A is very, very high. But once begun, the marginal cost of additional output is near zero. Draw this situation using the marginal-cost curve 17. It requires a large sum of money to produce a musical CD. The band has to be formed, practiced, and so forth. The recording studio has to be rented and the music performed and taped. Once one CD has been created, it costs virtually nothing to produce additions CDs. Draw the average and marginal costs for this business. 12. Does the following statement make sense: "You made a real blunder. The $600 you pa for repairs is worth more than the car." 13. Explain the statement, "We had to increase our volume to spread the overhead." 14. Three 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 501 for insurance and 1.50 per person per hour for materi als and supplies. Their services would be priced at $10 per hour per person
Chapter 22 Supply: The Costs of Doing Business Why does the minimum point of the average-total-cont curve show the quantity at which the firm in most eff ciently supplying output in the short run! II. Consider a firm with a fixed-size production facility as described by its existing cost curves. Explain what would happen to those cost curves mandatory health insurance program were imposed & What are variable costs What is the marginal cont on all firms. d. How many student hours would it take to break event What 15. Express Mall offers overnight delivery to whether required the firm to provide a health insurance pro gram for each employee worth 10 percent of the employee's salary! How would that plan compare to one that requires each firm to provide a $100.000 group program that would cover all employees in the firm, no matter what the number of employees was? is attempting to come to some conclusion on to expand its facilities. Currently its fixed costs are $2 million per month, and its variable costs are $2 per package. It charges $12 per package and has a monthly volume of 2 million packages. If it expands its fixed costs will rise by $1 million and its variable costs will fall to $1.50 per package. Should it expand? 16. Suppose the cost of starting Business A is very, very high. But once begun, the marginal cost of additional output is near zero. Draw this situation using the marginal-cost curve 17. It requires a large sum of money to produce a musical CD. The band has to be formed, practiced, and so forth. The recording studio has to be rented and the music performed and taped. Once one CD has been created, it costs virtually nothing to produce additions CDs. Draw the average and marginal costs for this business. 12. Does the following statement make sense: "You made a real blunder. The $600 you pa for repairs is worth more than the car." 13. Explain the statement, "We had to increase our volume to spread the overhead." 14. Three 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 501 for insurance and 1.50 per person per hour for materi als and supplies. Their services would be priced at $10 per hour per person
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 3MC
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