c) TC() -40q+ 200 Marginal cost MC Average cost AC- Returns to scale Marginal cost: MC-...
Question 1. Cost concepts The concepts of "marginal cost" (MC) and "average cost" (AC) are routinely used in economics. (a) Suppose the total cost function is C(q) = 9+0.250, where is the output level of the firm. Derive the marginal cost and the average cost implied by this cost function. Provide a diagram (with q on the horizontal axis) to illustrate the shape of these MC and AC functions. (b) What does returns to scale mean? Does a firm with...
Using the knowledge of calculus derive and sketch the marginal cost (MC) and average cost (AC) functions from the following total cost (TC) function. Using the graph briefly discuss the relation between MC and AC. ??=?^? −??^? +???
A firm’s total cost curve is TC = 40Q – 10Q2 + Q3. a. What are the equations for Marginal Cost and Average Total Cost? b. What is the minimum efficient scale? c. Over what range of output does the production function exhibit economies of scale, and over what range does it exhibit diseconomies of scale?
3. A firm’s total cost curve is TC = 40Q – 10Q2 + Q3. a. What are the equations for Marginal Cost and Average Total Cost? b. What is the minimum efficient scale? c. Over what range of output does the production function exhibit economies of scale, and over what range does it exhibit diseconomies of scale?
1 Economies of Scale Consider the total cost function (TC): TC(q) = 100+ 40 + 492 where q is output. 1.1 (10 points) Obtain the index of the extent of scale economies S = MCQ, where AC is average cost and MC is marginal cost. What is the value of this index when q = 2? Provide an intuitive interpretation for this number. 1.2 (10 points) Is there any range of production characterized by scale economies? At what production level...
1. For a constant returns to scale production function: a. marginal costs are constant but the average cost curve as a U-shape b. both average and marginal costs are constant c. marginal cost has a U-shape, average costs are constant d. both average and marginal cost curves are U-shaped 2. The production function q = 10K +50L exhibits: a. increasing returns to scale b. decreasing returns to scale c. constant returns to scale d. none of the above
4. Using a marginal cost (MC)-average cost (AC) graph show the three relationships discussed in class about the relationship between MC and AC and what is happening to AC when a. MC is greater than AC. b. MC is less than AC. c. MC is equal to AC.
Finish the table.
MPL: Marginal production of labor
TC: Total cost
MC: Marginal Cost
AFC: Average fixed cost
AVC: Average variable cost
ATC: Average total cost
lormal text - Times New... - 12 B I VA G E A E 1 E- Labor Week 6 Assignment: Production Costs 20 Points) Output MPL FC VC TC MC AFC AVC ATC (Q) 0 25 WN 25 50 75 100 13 25 15 F 16 25 125 1. Complete the table above. (4...
If Marginal Cost (MC) is higher than Average Cost (AC), average cost is a. falling b. rising c. constant d. none of the above
e) Suppose that a competitive firm's marginal cost of producing output q is given by MC(q) -3+2q. Assume that the market price of the firm's product is $9. i) What level of output will the firm produce? (2p) ii) What is the firm's producer surplus? (4p) ii) Suppose that the average variable cost of the firm is given by AVC(g)-3+q. Suppose that the firm's fixed costs are known to be $3. Will the firm be earning a positive, negative, or...