Discussion section problem set 4 econ 200

Discussion section problem set 4 econ 200 - 3. Consider the...

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Problem Set 4 Economics 200 We will review problems 1-3 in discussion sections beginning Wednesday, October 28. We will review problems 4-6 in discussion sections beginning Wednesday, November 4. 1. Do Problem 13 on page 271 in Parkin (9 th edition). 2. Your donut store has the following costs: Quantity (000’s donuts) Total Variable Cost Total Cost 0 $0 $30 1 $10 $40 2 $25 $55 3 $45 $75 4 $70 $100 5 $100 $130 6 $135 $165 (a) Calculate average variable cost, average total cost, and marginal cost for each quantity. (b) Graph the average variable cost, average total cost, and marginal cost curves. What is the relationship between the marginal cost curve and the average total cost curve? Between the marginal cost curve and the average variable cost curve?
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Unformatted text preview: 3. Consider the following table of long run total costs for three different firms: Quantity Firm 1 Firm 2 Firm 3 $60 $11 $21 1 $70 $24 $34 2 $80 $39 $49 3 $90 $56 $66 4 $100 $75 $85 5 $110 $96 $106 6 $120 $119 $129 Which of these firms experience economies of scale and which experience diseconomies of scale? 4. The following table shows the short run total costs of a firm for different levels of output. Output Total Cost (in $) 15 1 40 2 60 3 75 4 95 5 120 (a) For each level of output, calculate total fixed cost, total variable cost, average fixed cost, average variable cost, and marginal cost. (b) If the price of the output is $25, what is the profit maximizing level of output?...
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Discussion section problem set 4 econ 200 - 3. Consider the...

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