Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 13.3, Problem 3QQ
To determine
Marginal cost for a fifth car.
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Suppose Honda’s total cost of producing 4 cars is $225,000 and its totalcost of producing 5 cars is $250,000. What is the average total cost of producing 5 cars?
What is the marginal cost of the fifth car? • Draw the marginal-cost curve and the average-total-cost curve for a typical firm, and explain why these curves cross where they do.
10: What is the Difference between Fixed Costs, Variable Costs, and Marginal Costs?
11: How does one calculate Fixed Costs, Variable Costs, Marginal Costs, and Profits?
12: What is meant by Economies and Diseconomies of Scale?
© Macmillan Learning
The figure depicts the long-run average total cost curve for Magma Motors. If this firm is currently producing 11,000 cars
per year, what does it experience if it increases output by 1,000 cars?
Figure: Long-Run Average Total Cost Curve for Magma Motors
Cost
(per car)
$5,000
4,000
0
Long-run
average
total cost
$10,000
11,000 12,000
Quantity
economies of scope
economies of scale
minimum efficient scale
diseconomies of scale
Chapter 13 Solutions
Principles of Economics (MindTap Course List)
Ch. 13.1 - Prob. 1QQCh. 13.2 - Prob. 2QQCh. 13.3 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQ
Ch. 13 - Prob. 1QRCh. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - Prob. 6PACh. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PA
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- 20 15 LRAC 10 10 15 20 25 30 Quantity (units per hour) 1. In the above figure, the long run average cost LRAC, between 0 and 10 units per hour what does the firm exhibit (Economies of scale, Diseconomies of scale or constant return to scale)? 2. In the above figure, the long run average cost LRAC, between 10 and 20 units per hour what does the firm exhibit (Economies of scale, Diseconomies of scale or constant return to scale)? 3. In the above figure , the long run average cost LRAC, between 20 and 30 units per hour what does the firm exhibit (Economies of scale, Diseconomies of scale or constant return to scale)? В I Cost (dollars per unit)arrow_forwardQUESTION 6 At a total cost of $3,100, a company can produce 4 scooters. It has fixed costs of $1,000. If it produces 5 scooters, the costs of production total $3,800. Which of the following statements is true? O Variable costs of producing 4 scooters total $3096. O The average (or per unit) cost of producing 5 scooters is $800 per scooter The total cost curve for this firm is downward sloping Fixed costs will be higher when it produces 5 scooters The marginal cost of producing the fifth scooter is $700arrow_forwardUse the following scenario to answer the questions that follow. Steve owns a bike store. His total costs are $1.2 million per year, his variable costs are $750,000, and his fixed costs are $450,000 per year. Last year, Steve sold 1,200 bikes. Steve's average variable cost was per bike. A) $625 O B) $375 O C) $1,000 D) $1,200arrow_forward
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