Ō DI SRATCI SRATC₂ Q₂ Q3 Output FIGURE 8-2 LRAC 2) Refer to Figure 8-2. In the long run, the lowest-cost level of output achievable by this firm is A) Q1. B) Q₂. C) Q3. D) not shown in the diagram
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- TC = 81 + 16Q + 3Q2What is the average variable cost when 10 units are produced?It costs a baker a fixed cost of $420 and variable cost of $2.10 per cupcake. A cupcake issold for $4.90 each.(i) Make a table showing the total cost and the revenue obtained from producing 20,40,60,80 and 100 cupcakes.(ii) Write algebraic expressions representing the cost C and the revenue R as functions of the number of cupcakes X produced and number of cupcakes X sold respectively.(iii) Graph both functions on the same coordinate axes and from your graph determine the cordinate at which cost equals revenue.A local company is planning to manufacture and market a four-slice toaster. For this toaster, the research department’s estimates are aweekly demand of 300 toasters at a price of $25 per toaster and a weekly demand of 400 toasters at a price of $20. The financial department’s estimates are fixed weekly costs of$5,000 and variable costs of $5 per toaster. Assume that the cost function is linear. Use the financial department’s estimates to express the cost function interms of ?. Determinethe Marginal cost and interpret the results.
- 1. Exercise 9.1 A study of 86 savings and loan associations in six northwestern states yielded the following cost function. 2.38 0.006153Q 0.000005359Q² 19.2X1 C + + (2.62) (2.84) (3.16) (3.50) where C = average operating expense ratio, expressed as a percentage and defined as total operating expense ($ million) divided by total assets ($ million) times 100 percent. Q = output; measured by total assets ($ million) X1 = ratio of the number of branches to total assets ($ million) Note: The number in parentheses below each coefficient is its respective t-statistic. Which of the variable(s) is (are) statistically significant in explaining variations in the average operating expense ratio? (Hint: t0.025,7€ 1.99 .) Check all that apply. X1 Q2 What type of average cost-output relationship is suggested by these statistical results? Quadratic Linear Cubic Based on these results, what can we conclude about the existence of economies or diseconomies of scale in savings and loan associations in…Q2. A company manufactures and sells wallets. The selling price is 54.90 AED per wallet. The total cost function is linear, and costs amount to 50,000 AED for 2000 wallets and 32,120 AED for 800 wallets. a) Find the cost function. b) Find the break-even quantity.Assume that it costs a company approximately C(x) = 400,000 + 160x + 0.002x2 dollars to manufacture x smartphones in an hour. (a) Find the marginal cost function. Use it to estimate how fast the cost is increasing when x = 10,000. $ per smartphone Compare this with the exact cost of producing the 10,001st smartphone. The cost is increasing at a rate of $ per smartphone. The exact cost of producing the 10,001st smartphone is $ Thus, there is a difference of $ (b) Find the average cost function C and the average cost to produce the first 10,000 smartphones. C(x) = C(10,000) = $ (c) Using your answers to parts (a) and (b), determine whether the average cost is rising or falling at a production level of 10,000 smartphones. The marginal cost from (a) is --Select--- v than the average cost from (b). This means that the average cost is ---Select--- v at a production level of 10,000 smartphones. Need Help? Watch It
- A manufacturer of Chocolate has a fixed cost of Tk.60000 and variable cost is Tk.7 perproduced Chocolate. Selling price is Tk.10 per Chocolate.Requirement- At what number of units will break even occur and At what sales (revenue) volume will break occur?Refer to the following: Output 0 50 100 150 200 Total Cost $ 300 800 1050 1650 2400 Average Variable Cost when 150 units of output are produced is $ 9 The additional cost of producing the 117th unit of output is $ ExplainAssume that it costs a company approximately C(x) = 400,000 + 140x + 0.003x? dollars to manufacture x smartphones in an hour. (a) Find the marginal cost function. 400,000 – 0.000009 Use it to estimate how fast the cost is increasing when x = 10,000. 2$ per smartphone Compare this with the exact cost of producing the 10,001st smartphone. The cost is increasing at a rate of $ per smartphone. The exact cost of producing the 10,001st smartphone is $ Thus, there is a difference of $ (b) Find the average cost function C and the average cost to produce the first 10,000 smartphones. C(x) = C(10,000) = $ (c) Using your answers to parts (a) and (b), determine whether the average cost is rising or falling at a production level of 10,000 smartphones. -Select--- at a production level of 10,000 smartphones. The marginal cost from (a) is --Select--- than the average cost from (b). This means that the average cost is
- When Ajax Co. produced 3 units of output per week, its total fixed cost was $100 and total variable cost was $50. When output increased to 4 units per week, total fixed cost remained at $100 and Ktotal variable cost increased to $65. When output was 4 units per week, total cost was $(Enter your response as an integer.)A company makes solar panels. The company's revenue function, in dollars, is R(n)= 10n , where n is the number of panels produced. The cost function is C(n) = 100(2)30 . R and C are shown on the graph below. 1000 800 600 400 200 20 40 60 80 100 1 Number of Panels a) Estimate from the graph i) the break-even points e) How would your answers for break-even points and maximum profit change if i) the number of dollars of revenue per panel is increased slightly? ii) the cost function is changed to C(n)=100(2)35 ? f) What does the number that was changed in part e) ii) represent? DollarsThe difference between ATC and AVC decreases with decrease in level of output.
