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- Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?Based on your answers to the WipeOut Ski Company in Exercise 7.3, now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of 25 each. What will be the companys profits or losses? How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? At the given quantity and price, is the marginal unit produced adding to profits?How does fixed cost affect marginal cost? Why is this relationship important?
- A computer company produces affordable, easy-to-use home computer systems and has fixed costs of 250. The marginal cost of producing computers is 700 for the first computer, 250 for the second, 300 for the third, 350 for the fourth, 430 for the fifth, 450 for the sixth, and 500 for the seventh. Create a table that shows the companys output, total cost, marginal cost, average cost, variable cost, and average variable cost. At what price is the zero-profit point? At what price is the shutdown point? If the company sells the computers for 500, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss. If the firm sells the computers for 300, is it making a profit or a loss? How big is the profit or loss? Sketch a graph with AC, MC, and AVG curves to illustrate your answer and show the profit or loss.Would you rather have efficiency or variety? That is, one opportunity cost of the variety of products we have is that each product costs more per unit than if there were only one kind of product of a given type, like shoes. Perhaps a better question is, What is the right amount of variety? Can there be too many varieties of shoes, for example?What is the difference between accounting profit and economic prof? A Economic profit subtracts both explicit and implicit costs from total revenue, while acounting profit only subtracts explicit costs. OR Accounting proft only subtracts implicit costs from totsi revenue, while economic profit only subtracts explicit costs. OC Economic proft orly subtracts implicit costs from total revenue, while accounting profit only subtracts explicit costs. OD. Accounting proft suberacts both explicit and implicit costs from total revenue, while economic proft only subtracts explicit costs
- Under which of the folowing examples is t likaly that the accounting profit is positive and the economic profit is negative? OA Using a restaurant you purchased to sell Menican food instead of talian food. OR It you use a diamond mine as a touriet atraction instead of using it for mining. Oc Opering a bank branch near a university campus. OD. Such a scenario, where accounting cost is positive and economic profit is negafive, is not possibie.Course dashboard Generally, economies of scope are present when. Lutfen birini seçin. O a joint output is greater from a single firm producing two goods than could be achieved by two different firms each produoing a single product (assuming equivalent production anputs in both situations). O b.egonorues of scale are constant in the joint production of twaproducrs Oc egonomes of scale are present in the preduction of tvo or more coods Od.joint.otputis less from a single firm than could be achieved fomtwedifferent firms SLuations) SONRAKİ SAYFA FASon 5 Marginal cost is given by 30 + 20Q - 12Q2. Fixed cost is 100. What is the average cost? Henüz 30 OA3Q? + 10Q + 70 + cevaplanmad 16,00 azennden aretlenmis 100 O B. 3Q? + 20Q + 30 + Sonyu aretle 100 OC 40 + 10Q + 30 + 30 O D. 4Q? + 10Q + 70 +
- What is the difference between accounting profit and economic profi? OA Economic profit subtracts both explicit and implicit costs from total revenue, while accounting proft only subtracts explicit costs. OB. Accounting profit only subtracts implicit costs from total revenue, while economic profit only subtracts explicit costs. OC Economic profit only subtracts implicit costs from total revenue, while accounting profit only subtracts explicit costs. OD. Accounting profit suberacts both explicit and implicit costs from total revenue, while economic profR only subtracts explicit costsabus ules Marginal Marginal Output Revenue Cost se Materials aw-Hill ct 012 $18 $4 $18 $6 $18 $10 3 $18 $18 4 $18 $26 $37 ns Resources 5 $18 Refer to the data in the accompanying table. If the firm's minimum average variable cost is $17, the firm's profit-maximizing level of output would be. p O 1 03 04 02 200mUse the figure below to answer the following questions. Average cost (dollars per sweater) 12 H Select one: OA. Plant A OB. Plant B O C. Plant C O D. Plant D O E. none of the above 10 8 6 4 2 0 5 10 ATCA ATCB ATCC ATCD 15 20 25 30 Output (sweaters per day) Figure 11.4.2 Refer to Figure 11.4.2, which illustrates the short-run average total cost curves for four different plant sizes. Which plant has the lowest average total cost for an output rate of 5 sweaters a day?
