1), Micky's auto mechanic shop has a daily total cost represented by: ? = 98 + 2? + 2?^[2]. Shop's marginal cost is given by: ?? = 2 + 4?, where ?is the number of repaired cars.

a. Derive an expression for average cost.

b. Find the quantity range where the shop experiences the economies scale (Hint:scale economy

index is given by: S = AC/MC

C. At what production level are scale economies exhausted²?

2, Leah's fruit-based beverages company supplies orange juice. Following table shows the relationship between the output and corresponding average cost.

Quantity (gallons) Average Cost ($)

25	25
50	24
75	22
100	20
125	20
150	21
175	22
200	24

a. Prepare new table that presents following additional information: Total Cost, Marginal Cost, Scale Economy Index(round numbers up to two decimal places)^[2]. The order of table columns should be: Quantity, Average Cost,Total Cost, Marginal Cost, Scale Economy Index. Calculate marginal cost using

?? = ?TC/?Q Scale economy index is given by: ? = AC/MC

b. At what production level are scale economies exhausted?

3), Assume that the manufacturing of generic medicine XYZ is a perfectly competitive industry. Suppose that the annual demand for this medicine is given by: ?^? = 1,450 ? 30?. There are exactly a hundred manufacturers in the market. Each manufacturer has the same production costs. These are described by total and marginal cost functions of: ?(?) =