Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Use Figure 9

Use Figure 9

Economics

Use Figure 9.16 to answer questions:

a) IF the firm produces 5,000 units of output with a plant using 10 units of capital, the average cost is $______ and total cost is $______

b) IF the firm produces 5,000 units of output with a plant using 30 units of capital, the average cost is $______ and total cost is $______

c) In the long run planning horizon which plant should the manager use to produce 5,000 units of output and why?

 

 

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

a) Average Cost = $0.72

Total Cost = $0.72*5,000 = $3,600

 

b) Average Cost = $0.30

Total Cost = $0.30*5,000 = $1,500

 

c) When planning is done for long term it can be seen from the graph that average total cost ($0.30) is minimum when plant with 30 units of capital should be used.