Question
In: Economics
Draw a diagram showing the typical relationship between the Average Total Cost (ATC) and Marginal Cost...
Draw a diagram showing the typical relationship between the Average Total Cost (ATC) and Marginal Cost (MC) curves for a firm.
Solutions
Expert Solution
The Marginal Cost (MC) curves for a firm are related to the shape of the ATC and AVC curves in the following ways:
-- At a level of quantity at which the marginal cost curve is above the average total cost, the latter curve is rising
-- If marginal cost equals average total cost, then average total cost is at its minimum value.
-- If marginal cost is below average total cost, then the latter curve is falling.
Average total cost curve is a U-shape. It is always the case when there is increasing marginal costs. Also marginal cost curve intersects the ATC curve at the ATC curve's minimum point. It will always be the case when there is increasing marginal costs. Due to fixed cost, marginal cost almost always starts below average total cost. As quantity rises, ATC will fall and MC will rise. Eventually they intersect, and then MC continues to rises and pulls ATC up after it.
Rahul Sunny answered 2 years agoRelated Solutions
A. draw a graph showing the marginal cost, average total cost, demand, marginal revenue, and average...
A. draw a graph showing the marginal cost, average total cost,
demand, marginal revenue, and average revenue for a perfectly
competitive firm. Indicate the level of profit where profit is
maximized, shade in the area of maximum profit, give the amount of
maximum profit, and explain how this number is calculated.
B.Graph the short-run supply curve for a perfectly competitive
firm and explain where this short-run supply curve lies. Indicate
the following curves on your graph: marginal cost curve, marginal...
1. What is the relationship between marginal cost (MC) and average total cost (ATC)? 2. What...
1. What is the relationship between marginal cost (MC) and
average total cost (ATC)?
2. What is the difference between positive and normative
statements? Which do economists generally consider the more
persuasive statement type, and why?
3. What are the conditions needed for the Supply and Demand
model to hold?
4. What is the difference between Quantity Demanded (Q_D) and
Demand (D)?
Question 2 Draw the marginal cost (MC), average variable cost (AVC) and average total cost (ATC)...
Question 2
Draw the marginal cost (MC), average variable cost (AVC) and
average total cost (ATC) curves for a typical firm in a diagram,
and briefly explain the relationship between:
a. AVC and ATC.
b. MC and ATC.
(1) Draw the diagram showing the relationship between SAC and LAC. (2) Draw the diagram showing...
(1) Draw the diagram showing the relationship between SAC and
LAC.
(2) Draw the diagram showing the relationship between SMC and
LMC.
Quantity Total Revenue Marginal Revenue Total Cost Marginal Cost Fixed Costs ATC Average Fixed Costs Average...
Quantity
Total Revenue
Marginal Revenue
Total Cost
Marginal Cost
Fixed Costs
ATC
Average Fixed Costs
Average Variable Costs
0
0
-
10
-
10
-
-
-
1
8
24
14
24
2
16
34
10
17
3
24
42
8
14
4
32
49
7
12.25
5
40
57
8
11.4
6
48
67
10
11.17
7
56
81
14
11.57
8
64
99
18
12.38
9
72
123
24
13.67
1b. At a price of $14, what is...
Explain the relationship between total, marginal, and average product.
Explain the relationship between total, marginal, and average
product.
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows
the weekly marginal cost (MC) and average total cost (ATC) for
Smitten, a perfectly competitive firm that produces children’s
mittens in a competitive market.
Smitten's
Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
The MC (marginal cost) curve and the ATC (average total cost) curve intersect Group of answer...
The MC (marginal cost) curve and the ATC (average total cost)
curve intersect
Group of answer choices
at the MC curve's maximum point
at the ATC curve's maximum point
at the ATC curve's minimum point
at the MC curve's minimum point
8. The table below shows the weekly marginal cost (MC) and average total cost (ATC) for...
8. The table below shows the weekly marginal cost (MC) and
average total cost (ATC) for Buddies, a perfectly competitive firm
that produces novelty ear buds in a competitive market. The market
price of ear buds is $6.00 per pair.
Quantity of Ear buds
MC ($)
ATC ($)
5
-
9
10
2
5.5
15
2.44
4.48
20
3.56
4.25
25
4.5
4.3
30
5.02
4.42
35
5.96
4.64
40
8.56
5.13
Instructions: In part a, enter your answer as...
The table below shows the weekly marginal cost (MC) and average total cost (ATC) for Smitten,...
The table below shows the weekly marginal cost (MC) and average
total cost (ATC) for Smitten, a perfectly competitive firm that
produces children’s mittens in a competitive market.
Smitten's Production Costs
Quantity (pairs of mittens)
Marginal Cost (dollars)
Average Total Cost (dollars)
20
$1.60
$1.25
25
2.00
1.40
30
2.45
1.58
35
3.55
1.86
40
4.00
2.13
45
5.50
2.50
50
6.00
2.85
55
8.50
3.36
Instructions: In part a, enter your answer as a
whole number. In parts b–d,...
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