P (a) AS(P 100) Q P $560 500 440 (b) AS(P125) Q P $500 440 380 (C) AS(P75) 125 125 125 $620 100 100 100 560 75 75 75 500 Suppose the full employment level of real output (Q) for a hypothetical economy is $500, the price level (P) initially is 100, and prices and wages are flexible both upward and downward. Refer to the accompanying short-run aggregate supply schedules. In the long run, an increase in the price level from 100 to 125 will O increase real output from $500 to $560. Q O change the aggregate supply schedule from (a) to (c) and result in an equilibrium level of real output of $560. O decrease real output from $500 to $440. O change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500downkard. Refer to the accompanying short run aggegate supply schedules. in the long run. an increace in the price level fromShow Transcribed Text AVC=a+bQ+cQ²Jobtained the following results. Total fixed cost (7FC) at Straker Industries is $1,000.C.d.C.d.b.e.C.d.b.C.d.C.d.DEPENDENT VARIABLE: AVC R-SQUAREOBSERVATIONS: 350.8713VARIABLEINTERCEPTQQ2$24.50$33.60PARAMETERESTIMATEThe estimated short-run marginal cost function (SMC) at Straker Industries is:a.SMC = 43.40-1.40¹ +0.070¹SMC = 43.4-1.40+0.070¹SMC=43.40-5.60¹ +0.60'SMC-43.4-5.60+0.60²$72.80$121.8043.40-2.800.20At what level of output is average variable cost (AVC) at its minimum point for Straker Industries?a.0.14b.4.771428F-RATIO108.3$19.40$67.40$171.40$179.40$1,348$1,498$2,348$4,428STANDARDERROR13.80At Straker Industries, average variable cost (AVC) reaches its minimum value at $_a.0.900.05P-VALUE ON F0.0001T-RATIO3.14-3.114.00If Straker Industries produces 20 units of output, what is estimated average variable cost (AVC)?a.b.P-VALUE0.00360.00390.0004If Straker Industries produces 20 units of output, what is estimated total variable cost (TVC)?a.b.If Straker Industries produces 20 units of output, what is estimated total cost (TC)?a$1,348

The correct answer is to change the aggregate supply schedule from (a) to (b) and result in an…

Answered: P (a) AS(P 100) Q P $560 500 440 (b)…

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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P (a) AS(P 100) Q P $560 500 440 (b) AS(P125) Q P $500 440 380 (C) AS(P75) 125 125 125 $620 100 100 100 560 75 75 75 500 Suppose the full employment level of real output (Q) for a hypothetical economy is $500, the price level (P) initially is 100, and prices and wages are flexible both upward and downward. Refer to the accompanying short-run aggregate supply schedules. In the long run, an increase in the price level from 100 to 125 will O increase real output from $500 to $560. Q O change the aggregate supply schedule from (a) to (c) and result in an equilibrium level of real output of $560. O decrease real output from $500 to $440. O change the aggregate supply schedule from (a) to (b) and result in an equilibrium level of real output of $500 downkard. Refer to the accompanying short run aggegate supply schedules. in the long run. an increace in the price level from Show Transcribed Text

AVC=a+bQ+cQ²
Jobtained the following results. Total fixed cost (7FC) at Straker Industries is $1,000.
C.
d.
C.
d.
b.
e.
C.
d.
b.
C.
d.
C.
d.
DEPENDENT VARIABLE: AVC R-SQUARE
OBSERVATIONS: 35
0.8713
VARIABLE
INTERCEPT
Q
Q2
$24.50
$33.60
PARAMETER
ESTIMATE
The estimated short-run marginal cost function (SMC) at Straker Industries is:
a.
SMC = 43.40-1.40¹ +0.070¹
SMC = 43.4-1.40+0.070¹
SMC=43.40-5.60¹ +0.60'
SMC-43.4-5.60+0.60²
$72.80
$121.80
43.40
-2.80
0.20
At what level of output is average variable cost (AVC) at its minimum point for Straker Industries?
a.
0.14
b.
4.7
7
14
28
F-RATIO
108.3
$19.40
$67.40
$171.40
$179.40
$1,348
$1,498
$2,348
$4,428
STANDARD
ERROR
13.80
At Straker Industries, average variable cost (AVC) reaches its minimum value at $_
a.
0.90
0.05
P-VALUE ON F
0.0001
T-RATIO
3.14
-3.11
4.00
If Straker Industries produces 20 units of output, what is estimated average variable cost (AVC)?
a.
b.
P-VALUE
0.0036
0.0039
0.0004
If Straker Industries produces 20 units of output, what is estimated total variable cost (TVC)?
a.
b.
If Straker Industries produces 20 units of output, what is estimated total cost (TC)?
a
$1,348

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