14. Use the variable cost information in the following table to calculate averag
ID: 1227301 • Letter: 1
Question
14. Use the variable cost information in the following table to calculate average variable cost and average cost (assume fixed cost is $350), and then use this data to answer the
questions that follow. One of them might not
Index of real prices
3 2.5 2 1.5 1 0.5
Long-run trend
1940 1960 1980 2000
Year
1900 1920
have an answer.
Q FC VC AVC AC
10 $350 $100
20 $350 $180
30 $350 $240
40 $350 $300
50 $350 $450
60 $350 $630
70 $350 $840
Give an example of a price at which this firm would want to produce and sell output in both the short run and the long run.
Give an example of a price at which this firm would want to produce and sell output in neither the short run nor the long run.
Give an example of a price at which this firm would want to produce and sell output in the long run but not in the short run.
Give an example of a price at which this firm would want to produce and sell output in the short run but not in the long run.
15. Look carefully at Figure 11.6.What is represented by the space in between the average cost (AC) and average variable cost (AVC) curves? Why do they get closer together as quantity increases? Will they ever meet?
Q FC VC AVC AC
10 $350 $100
20 $350 $180
30 $350 $240
40 $350 $300
50 $350 $450
60 $350 $630
70 $350 $840
Explanation / Answer
14.
for question 15, fig 11.6 is missing
Q FC($) VC($) AVC($) = VC / Q TC($) = FC + VC AC($) = TC / Q 10 350 100 10 450 45 20 350 180 9 530 26.5 30 350 240 8 590 19.67 40 350 300 7.5 650 16.25 50 350 450 9 800 16 60 350 630 10.5 980 16.33 70 350 840 12 1190 17Related Questions
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