Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Chapter 9, Problem 1.4CE
To determine
To ascertain the variables that would appear to be the most important in explaining variations in operating expenditures per students.
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Define the term Cost Reduction?
Which cost concept is used to determine the most cost-efficient level of production? a) Average cost b) Total cost c) Marginal cost d) Variable cost
The following cost-output data were obtained as part of a study of the economies of scale in operating a charter high school in Wisconsin:
(see attachment)
3. What type of cost-output relationship (linear, quadratic, cubic) is suggested by these statistical results?
4.What variables (other than enrollment) would appear to be most important in explaining variations in operating expenditures per student?
5.Holding constant the effects of the other variables ( through ), determine the enrollment level (Q) at which average operating expenditures per student are minimized. (Hint: Find the value of Q that minimizes the (∂C/∂Q function.)
6.Again, holding constant the effects of the other variables, use the ∂C/ ∂Q function to determine, for a school with 500 students, the reduction in per-student operating expenditures that will occur as the result of adding one more student.
7.Again, holding the other variables constant, what would be the saving in perstudent operating expenditures of an…
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Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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