1. (0.2 pt) If the government imposes a $1,000 per year license fee on all pizza

Question

1. (0.2 pt) If the government imposes a $1,000 per year license fee on all pizza

      restaurants, both the _________________________ cost curve and the

      the _________________________ cost curve would shift as a result.

2. (1.5 pt) Fill in the table below. (Make sure to show all of your work.)

Output

(Fixed Costs)

(Variable Costs)

(Total Costs)

(Average Fixed Costs)

(Average Variable Costs)

(Average Total Costs)

(Marginal Costs)

0

$40

$0

1

$40

$10

2

$40

$18

3

$40

$25

4

$40

$35

5

$40

$47

6

$40

$60

7

$40

$75

8

$40

$95

9

$40

$120

10

$40

$150

3. (0.3 pt) Consider the following table of long-run costs for 2 different firms:

Quantity

1

2

3

4

5

6

7

Firm A

$60

$70

$80

$90

$100

$110

$120

Firm B

$11

$24

$39

$56

$75

$96

$119

Does each of these firms experience economies of scale or diseconomies of scale?

Explain. (Make sure to show all of your work.)

Output

(Fixed Costs)

(Variable Costs)

(Total Costs)

(Average Fixed Costs)

(Average Variable Costs)

(Average Total Costs)

(Marginal Costs)

0

$40

$0

1

$40

$10

2

$40

$18

3

$40

$25

4

$40

$35

5

$40

$47

6

$40

$60

7

$40

$75

8

$40

$95

9

$40

$120

10

$40

$150

Explanation / Answer

Ans)

1.
average total cost and average fixed cost
2.

Output (Fixed Costs) (Variable Costs) (Total Costs)=FC+VC (Average Fixed Costs)=FC/q (Average Variable Costs)=VC/q (Average Total Costs)=TC/q (Marginal Costs)=TCn-TCn-1 0 40 0 40 1 40 10 50 40 10 50 10 2 40 18 58 20 9 29 8 3 40 25 65 13.3333 8.33333 21.6667 7 4 40 35 75 10 8.75 18.75 10 5 40 47 87 8 9.4 17.4 12 6 40 60 100 6.66667 10 16.6667 13 7 40 75 115 5.71429 10.7143 16.4286 15 8 40 95 135 5 11.875 16.875 20 9 40 120 160 4.44444 13.3333 17.7778 25 10 40 150 190 4 15 19 30

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.