Answer the following:

1.

Suppose you have a production technology that can be characterized by a learning curve. Every time you increase production by one unit, your marginal cost decreases by $6. There are no fixed costs, and the first unit costs you $76 to produce.

Use the given information to fill in the marginal cost of each unit, as well as the total cost and average cost of each level of output.

Quantity	Marginal Cost	Total Cost	Average Cost
(Units)	($)	($)	($/unit)
1	$76	$76	$76
2
3
4
5
6

Suppose you receive a request for proposal (RFP) on a project for two units.

Your break-even price for two units is _______

.

Suppose that if you get the contract, you estimate that you can win another project for two more units.

The break-even price for those next two units alone is _______

2.

Under constant returns to scale, average cost (rises, falls, remains constant) ______ as the quantity produced increases. Over this range of output, the marginal cost curve is (higher than, lower than, equivalent to) ______ the average cost curve.

.