In Exhibit 7 in this chapter, the output level where average total cost is at a minimum

Question:

In Exhibit 7 in this chapter, the output level where average total cost is at a minimum is greater than the output level where average variable cost is at a minimum. Why?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics A Contemporary Introduction

ISBN: 978-1111415921

9th edition

Authors: William A. McEachern

See More Books

Question Posted: Dec 12, 2015 05:21 AM

See More Questions

Define Q to be the level of output produced and sold, and assume that the firms cost function is given by the relationship TC = 20 + 5Q + Q2 Furthermore, assume that the demand for the output of the...
Multiple Choice Questions: 1. If a profit-maximizing monopolist is currently charging a price on the inelastic portion of its demand curve, it should a. Raise price and decrease output. b. Lower...
The Dijon Company's total variable cost function is TVC = 50Q - 10Q2 + Q3 where Q is the number of units of output produced. a. What is the output level where marginal cost is a minimum? b. What is...
In Exercises 1 through 18, differentiate the given function. y = x x + 1 2
Parrott, Inc., a C corporation, is owned by Abner (60%) and Deanna (40%). Abner is the president, and Deanna is the vice president for sales. Parrott, Abner, and Deanna are cash basis taxpayers. Late...
Dickens Company is a small editorial services company owned and operated by Monica Baker. On October 31, 2014, the end of the current year, Dickens Companys accounting clerk prepared the unadjusted...
11-2 What circumstances in pricing a new product might support skimming or penetration pricing? Answer: Skimming pricing is an effective strategy when: (1) enough prospective customers are willing to...
Steuben Printing Inc. began printing operations on March 1. Jobs 3-01 and 3-02 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 3-03...
CH18 #2 Please help with this asap. Thanks alot Multiple Production Department Factory Overhead Rates The total factory overhead for Bardot Marine Company is budgeted for the year at $1,365,000,...
Dale has been in business for some years. The following is his trial balance at 31 October 2020: Additional information (not taken into account when compiling the above trial balance): 1. Inventory...
Explain why the marginal cost curve must intersect the average total cost curve and the average variable cost curve at their minimum points. Why do the average total cost and average variable cost...
What types of changes could shift the long-run average cost curve? How would these changes also affect the short-run average total cost curve?
How does supply-chain management encourage cooperation between buyers and sellers?
Consider a piston with an orifice in a cylinder filled with a fluid of viscosity $\mu$ as shown in Fig. 1.106. As the piston moves in the cylinder, the fluid flows through the orifice, giving rise...
Add a function to SmallWorld that computes the global clustering coefficient of a graph. The global clustering coefficient is the conditional probability that two random vertices that are neighbors...
Show that the generators of the algebra (33.8) are related by parity. For a Dirac wavefunction the action of parity is $P \psi(\boldsymbol{x}, t) P^{-1}=\gamma_{0} \psi(-\boldsymbol{x}, t)$, up to a...
Extend the algorithm you designed for Exercise 6.2 so that it can evaluate positions that are nonterminalin other words, positions where the game has not yet finished. Your score should be positive...
In addition to tanh, another s-shaped smooth function, the logistic sigmoid function y=1 / (1+exp(x)), is commonly used as an activation function in neural networks. A common way to implement them in...
Each year, millions of American investors pour billions of dollars into investment companies, which use those dollars to buy the common stock of other companies. What do the investment companies...
Some people argue that the internal control requirements of the Sarbanes-Oxley Act (SOX) put U.S. companies at a competitive disadvantage to companies outside the United States. Discuss the...
Explain the difference between purchase price variances and cost performance variances.
What is the effect of a lower price level, other things constant, on the aggregate expenditure line and real GDP demanded?
What role do inventories play in determining the real GDP demanded? In answering this question, suppose initially that firms are either producing more than people plan to spend, or producing less...
What role do inventories play in determining the real GDP demanded? In answering this question, suppose initially that firms are either producing more than people plan to spend, or producing less...
Calculate Social Security taxes, Medicare taxes and FIT for Jordon Barrett. He earns a monthly salary of $11,100. He is single and claims 1 deduction. Before this payroll, Barretts cumulative...
Bass Accounting Services expects its accountants to work a total of 26,000 direct labor hours per year. The company's estimated total indirect costs are $ 260,000. The company uses direct labor hours...
The Balance Sheet has accounts where the accountant must make estimates. Some situations in which estimates affect amounts reported in the balance sheet include: Allowance for doubtful accounts....

In Exhibit 7 in this chapter, the output level where average total cost is at a minimum

Question:

Step by Step Answer:

As output increases the average fixed cost AFC must fall Therefore average total ...View the full answer

Microeconomics A Contemporary Introduction

Students also viewed these Economics questions