Consider a firm with the following short-run costs: Quantity Variable Cost Total Cost 1 30 90...
Consider a firm with the following short-run costs:
Quantity Variable Cost Total Cost
1 30 90
2 50 110
3 90 150
4 140 200
5 200 260
Draw the three cost ? explain the relation between MC CURVE AND ATC CURVE ?
ALSO THE RELATIONSHIP BETWEEN AVC CURVE AND ATC CURVE?
Homework Answers
Marginal cost is the additions made to total cost for every additional unit produced. It is computed as change in TC / change in Q. AVC is VC/Q and ATC is TC/Q
The graph is drawn below. We see that MC and AVC as well as MC and ATC display three features
- MC = AVC and MC = ATC when AVC and ATC are at their minimum levels respectively
- When MC > AVC and MC > ATC, both AVC and ATC are rising.
- When MC < AVC and MC < ATC, both AVC and ATC are falling.
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Consider a firm with the following short-run costs:
Quantity Variable Cost Total Cost
1 30 90...
Consider a firm with the following short-run costs: Quantity Variable Cost Total Cost 1 30 90...
Consider a firm with the following short-run costs: Quantity Variable Cost Total Cost 1 30 90 2 50 110 3 90 150 4 140 200 5 200 260 Calculate the firm's profit/loss, if the market price is $50 (MR=$50).
Quantity Variable Cost Total Cost 1 30 90 2 50 110 3 90 150 4 140...
Quantity Variable Cost Total Cost 1 30 90 2 50 110 3 90 150 4 140 200 5 200 260 If the market price is $50 (MR=$50), calculate how many units will the firm produce?
Q3. You are given the following short-run information for an individual firm. Labor (L) is the on...
Q3. You are given the following short-run information for an individual firm. Labor (L) is the only variable input. The price of labor is S200/week. Total Fixed costs are S1000/week. a. Complete the rest of the table. b. What patterm can you see from the column of marginal product of labor? How might you explain it? c. Draw the MPL and MC curves respectively. Describe the relationship between the MPL and MC Total Labor product QMPL TVC TC ATC MC...
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100,...
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100, irrespective of how many boats are produced. Total variable costs (TVC) will increase as output increases. Output Total variable cost(£) 50 2 80 100 - 4 Total fixed cost (£) 100 100 100 100 100 100 100 100 Total cost(£) 150 180 200 210 250 320 450 740 110 150 220 350 640 5 a. Plot the Total Cost (TC), Total Variable Cost (TVC),...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 90 80 6 2 50 3 40 30 AVC 10 20 30 40 50 70 100 QUANTITY Thousands of lamps)
1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual...
1. Draw two graphs. On the first, show the short-run profit maximizing output of an individual firm earning an economic profit, including MR, MC, AVC, and ATC. On the second, show the short-run market equilibrium price and quantity. Explain how the industry supply curve and the market equilibrium price and quantity are determined. 2. What is the relationship between the price on the two graphs? Why does this relationship exist? 3. Explain why a firm in a perfectly competitive industry...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) DAVC МСП 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps) We were unable to transcribe this imageWe were unable to transcribe this imageWe were unable to transcribe this image
COSTS (Dollars) 8 a88 + EmoK(LH14 6. Deriving the short-run supply curve Consider the competitive market...
COSTS (Dollars) 8 a88 + EmoK(LH14 6. Deriving the short-run supply curve Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry 100 90 70 60 ATC 50 40 30 20 AVC For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit....
Firm B’s short-run cost function is: C = 12 - 2q + 3q2 + F Find...
Firm B’s short-run cost function is:
C = 12 - 2q + 3q2 + F Find the following: A. AFC B. AVC C. ATC D. MC E. At what output quantity is average total cost (ATC) minimized? Assume F = 63. F. At what output quantity does the MC curve cross the ATC and AVC curves? Assume F = 63 G. Graph the AFC, AVC, ATC and MC curves. Assume F = 63.
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) AVC МСП OHH 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps) On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve...
Q3. You are given the following short-run information for an individual firm. Labor (L) is the only variable input. The price of labor is S200/week. Total Fixed costs are S1000/week. a. Complete the rest of the table. b. What patterm can you see from the column of marginal product of labor? How might you explain it? c. Draw the MPL and MC curves respectively. Describe the relationship between the MPL and MC Total Labor product QMPL TVC TC ATC MC...
Consider the following hypothetical example of a boat building firm. The total fixed cost is £100, irrespective of how many boats are produced. Total variable costs (TVC) will increase as output increases. Output Total variable cost(£) 50 2 80 100 - 4 Total fixed cost (£) 100 100 100 100 100 100 100 100 Total cost(£) 150 180 200 210 250 320 450 740 110 150 220 350 640 5 a. Plot the Total Cost (TC), Total Variable Cost (TVC),...
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. 90 80 6 2 50 3 40 30 AVC 10 20 30 40 50 70 100 QUANTITY Thousands of lamps)
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) DAVC МСП 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps) We were unable to transcribe this imageWe were unable to transcribe this imageWe were unable to transcribe this image
COSTS (Dollars) 8 a88 + EmoK(LH14 6. Deriving the short-run supply curve Consider the competitive market for sports jackets. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry 100 90 70 60 ATC 50 40 30 20 AVC For each price in the following table, use the graph to determine the number of jackets this firm would produce in order to maximize its profit....
Firm B’s short-run cost function is:
C = 12 - 2q + 3q2 + F Find the following: A. AFC B. AVC C. ATC D. MC E. At what output quantity is average total cost (ATC) minimized? Assume F = 63. F. At what output quantity does the MC curve cross the ATC and AVC curves? Assume F = 63 G. Graph the AFC, AVC, ATC and MC curves. Assume F = 63.
6. Deriving the short-run supply curve Consider the competitive market for halogen lamps. The following graph shows the marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves for a typical firm in the industry. COSTS (Dollars) AVC МСП OHH 0 10 90 100 20 30 40 50 60 70 80 QUANTITY (Thousands of lamps) On the following graph, use the orange points (square symbol) to plot points along the portion of the firm's short-run supply curve...
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