Beruflich Dokumente
Kultur Dokumente
Chapter 5: Problem 4
d. AFC|Q=10 = $100/10=$10.
Chapter 5: Problem 6
Chapter 5: Problem 7
a. Economies of scope exist since f aQ1Q2 = 90 (-0.5) Q1Q2 > 0 and fixed cost f 0 always.
c. Since a 0.5 0 , MC1 will increase if the division that produces product 2 is sold.
Problem Set: Problem 18
Marginal
Units of Units of Average
Units of Product of
Fixed Variable Product of TFC TVC TC AFC SAC MC
Output Variable
Input Input Variable Input
Input
a. $2,000; $2,000
b. $1.00; $0.40
e. SAC = TC/Q = (2,000 + 15Q 6Q2 + Q3)/Q = 2,000/20 + 15 6*20 + 202 = 395
f. The diminishing marginal returns start at min MC: dMC/dQ = 12 + 6Q = 0 => Q=2
g. The diminishing average returns start at min AVC: dAVC/dQ = 6 + 2Q = 0 => Q=3
c. MC = PL/MPL = 30/15 = 2
Problem Set: Problem 21
0 10,000 0 10,000
a. Marginal returns to the variable input (marginal productivity) starts to diminish beyond a certain
level of employment.
b. If LRAC is flat, the technology exhibits Constant Returns to Scale, and LRAC = LRMC.
$
units
LRAC = LRMC
Q
Problem Set: Problem 23
0 0 0 672