Microeconomics
2nd Edition
ISBN: 9780073375854
Author: B. Douglas Bernheim, Michael Whinston
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 3, Problem 5CP
To determine
Marginal cost and marginal benefit.
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One fitness club charges a $10 promo sign-up fee and $15 per month. Another club charges a $25 promo signup fee and $10 per month. For what number of months is the cost of the clubs equal?
Suppose that the cost function for a commodity is
C(x) = 40 + x2 dollars.
(a) Find the marginal cost at x = 4 units.
MC(4) =
Tell what this predicts about the cost of producing 1 additional unit.
The cost to produce the 5th unit is predicted to be $
(b) Calculate C(5) – C(4) to find the actual cost of producing 1 additional unit.
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The cost of renting tuxes for the Choral Society's formal is $21 down, plus $87 per tux. Express the cost C as a function of x, the number of tuxedos rented.
C(x) =
Use your function to answer the following questions.
(a) What is the cost of renting two tuxes?
%$4
(b) What is the cost of the second tux?
$4
(c) What is the cost of the 4,098th tux?
2$
(d) What is the variable cost?
%24
What is the fixed cost?
$4
What is the marginal cost?
%24
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- As a production process requires labor L and capital K, q = F (L, K). The wage for a labor is $500, the cost for one capital is $250. If the production plan is to produce 250 products, what is the firm's minimized cost? A: $7500 B: $5000 C: $12500 D: $10000arrow_forwardAssume that it costs a company approximately C(x) = 400,000 + 180x + 0.001x² 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--- O than the average cost from (b). This means that the average cost is ---Select--- O at a production level of 10,000 smartphones.arrow_forwardAssume 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 Itarrow_forward
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