Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Peter's Pipers produces plumbing pipe. The long-run total cost of Peter's pipes is LTC=20000Q-200Q^2+Q^3where Q is measured as thousands of feet of piping and is

Peter's Pipers produces plumbing pipe. The long-run total cost of Peter's pipes is LTC=20000Q-200Q^2+Q^3where Q is measured as thousands of feet of piping and is greater than 0. The long-run marginal cost of Peter's pipes is given as LMC=20000-400Q+3Q^2

a. Divide total cost by Q to obtain Peter's long-run average cost of producing pipe.

b.Exploit the relationship between LMC and LAC to find the quantity where LAC is at a minimum.

c. What is the lowest possible average cost at which Peter can produce pipe?

d.Over what range of output does Peter's Pipers experience economies of scale? Over what range of output does Peter's Pipers experience diseconomies of scale?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

2nd edition

1464187029, 978-1464189104, 1464189102, 978-0716759751, 716759756, 978-1464187025

More Books

Students also viewed these Economics questions

Question

Why has distributed processing become common in business networks?

Answered: 1 week ago

Question

Write short notes on Interviews.

Answered: 1 week ago

Question

Define induction and what are its objectives ?

Answered: 1 week ago

Question

Discuss the techniques of job analysis.

Answered: 1 week ago