You have collected the following data on output and total variable costs: TVC ($) 24,450 10 20 39,600 48,150 52,800 56,250 30 40 50 60 61,200 70 70,350 86,400 112,050 150,000 80 90 100 Identify the range of output exhibiting increasing returns (increasing MP), and the range exhibiting diminishing returns (decreasing MP). b. Current fixed costs for the company equal $14,300. Draw two graphs, both with Q on the horizontal axis: one graph shows TVC and TC, and the other shows AVC, AC, and MC. c. Suppose that the government imposes a $11,500 property tax hike on all businesses; how will that affect your two graphs; ie., which cost curves will be affected and how? a.

You have collected the following data on output and total variable costs: TVC ($) 24,450 10 20 39,600 48,150 52,800 56,250 30 40 50 60 61,200 70 70,350 86,400 112,050 150,000 80 90 100 Identify the range of output exhibiting increasing returns (increasing MP), and the range exhibiting diminishing returns (decreasing MP). b. Current fixed costs for the company equal $14,300. Draw two graphs, both with Q on the horizontal axis: one graph shows TVC and TC, and the other shows AVC, AC, and MC. c. Suppose that the government imposes a $11,500 property tax hike on all businesses; how will that affect your two graphs; ie., which cost curves will be affected and how? a.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter7: Economies Of Scale And Scope

Section: Chapter Questions

Problem 5MC

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