Mr. AI-Maashani owns high end wedding cake baking business in Salalah. He leases/rents 4 high tech computer-controlled cake baking machines, for which he pays RO125 per day. He cannot increase the number of machines he leases/rents. He can hire as many workers as he wants at a cost of RO75 per day per worker. These are the only two inputs (cake baking machines and labour) he uses in his cake baking business. Use this information to fill in the columns in the above table. Number of workers Number of cakes per day Fixed cost Variable cost Total cost Average total cost Marginal cost 0 0 1 10 2 25 3 45 4 60 5 70

Mr. AI-Maashani owns high end wedding cake baking business in Salalah. He leases/rents 4 high tech computer-controlled cake baking machines, for which he pays RO125 per day. He cannot increase the number of machines he leases/rents. He can hire as many workers as he wants at a cost of RO75 per day per worker. These are the only two inputs (cake baking machines and labour) he uses in his cake baking business. Use this information to fill in the columns in the above table. Number of workers Number of cakes per day Fixed cost Variable cost Total cost Average total cost Marginal cost 0 0 1 10 2 25 3 45 4 60 5 70

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis

Section: Chapter Questions

Problem 9TY

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the figure below, $/Q 174 125 118 80 m 59 MC AVC ATC n 48 40 28 u Q₂ Q3 Q4 Q5 O total variable cost at Q₂ units of output is represented by the area absv (i.e., TVC(Q)area absv) and total fixed cost at Q₂ units of output is represented by the area vsQ₂0 (i.e., TFC(Qs) - area vsQ₂0). total variable cost at Q3 units of output is represented by the area ruQ,0 (i.e., TVC(Q)- area ruQ,0) and total fixed cost at Qs units of output is represented by the area zfnk (i.e., TFC(Qs) - area zfnk). O total cost at Q4 units of output is represented by the area adQ40 (.e., TC(Q) - area adQ40) and total fixed cost at Q4 units of output is represented by the area adgi (i.e.. TFC(Q4) - area adgi). O total variable cost at Q₂ units of output is represented by the area absv (i.e., TVC(Q)- area absv) and total fixed cost at Q₂ units of output is represented by the area vsQ₂0 (ie.. TFC(Qs) - area vsQ,0). total variable cost at Q3 units of output is represented by the area zhQ₂0 (i.e., TVC(Q)area zhQ,0) and…
Units of Output 0 1 2 3 4 5 6 SO $45 $60 Variable Cost (dollars) $75 0 45 75 90 120 158 225 Total Cost (dollars) 60 105 135 150 180 Refer to Table 7-5. How much are total fixed costs? 218 285 Marginal Cost (dollars) 45 30 15 30 38 67
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