Activity 8 - Costs and Economies of Scale

Activity 8 - Costs and Economies of Scale - Econ 2023...

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Econ 2023 Activity 8 Name:____________________________ Costs and Economies of Scale Buffy the Vampire Slayer kills vampires for a living. Please answer the following questions regarding her vampire killing enterprise. 1. Please identify the following as Fixed Costs (FC) or Variable Costs (VC). Remember, variable costs are those that change with output (the number of vampires killed) and fixed costs are those that stay the same regardless of output: a. _____ The wooden stakes that she uses to drive through the vampires’ hearts. b. _____ The rigorous martial arts training that she endured to first learn how to kill vampires. c. _____ The garlic that she uses to poison vampires. d. _____ The annual medical insurance premiums that Buffy pays to make sure she has medical coverage in case she has a bad day at work. 2. Buffy notices that her Long Run Average Total Costs (LRATC) decrease with every vampire she kills between 0 and 50 vampires. Her Long Run Average Total Costs then remain constant as she kills between 51 and 100 vampires. When she kills over 100 vampires, her
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