“A firm that earns only normal profit is not covering all its costs.” Do you agree or disagree?

Q: The cost structure of the typical ice cream producer is as follows. Average total cost i 50 1 ATC(Q)…

A: The cost function describes the link between production and costs. The cost function is obtained by…

Q: Imagine yourself running a pizza restaurant over a short term horizon. Think about the following…

A: The amount of all costs brought about by a firm in creating a specific degree of result.

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: The diagram shows the short-run cost curves of a firm. Which statement is CORRECT? costs output

A: OPTION A is correct. Curve 1 is Average Fixed Cost Curve AFC = TFC/Q Since TFC is positive at levels…

Q: Please provide an example of sunk costs in bakery business and explain why they are sunk costs.

A: Money that is already spent, and cannot be recovered, is called sunk cost. There is popular saying…

Q: Explain the difference between fixed costs, sunk costs and variable costs. Provide an example that…

A: The total cost refers to the market value of inputs used by the firm in the production of goods and…

Q: What happens to the average fixed cost, when the output of a firm increases.

A: # In an economy, the average fixed cost is referred to be as fixed cost per unit of output produced.…

Q: People often believe that large firms in an industry have cost advantages over small firms in the…

A: Individuals generally feel that big businesses have economic benefits in a sector over smaller…

Q: After one month of operation, OU Café determined to shorten its business hours and close on…

A: The total costs of any firm includes fixed costs and variable costs. The fixed costs refer to those…

Q: Alejandro is one of the leading ceramic vase producers in the country. His total costs (TC) amount…

A: Average total cost = Total cost/ Output.

Q: Why can the distinction between fixed costs and variable costs be made in the short run?

A: Understanding the difference between fixed costs and variable costs is important for settling on…

Q: What is the relationship between a firm’s total revenue, profit, and total cost?

A: Total revenue (TR) is the amount earned by the firm by selling its goods. Total Cost (TC) is the…

Q: How General Motors improve or operate their economies of scale?

A: This significant car maker has encountered interruptions to its tasks as interest in autos has…

Q: List and explain which of the following is a fixed cost or a variable cost for  Caribbean Airlines.…

A: Total fixed costs are the total obligations of the firm per time period for all fixed inputs.  Total…

Q: At level of output, average fixed costs = $20, average variable costs $900. Given this information,…

A: Usually in the easy language we can call Average fixed cost as the cost which is gradually required…

Q: Imagine that you own your own business, or you are the manager of a company. Please provide an…

A: Sunk cost is a cost that has been paid and cannot be recovered in the future.

Q: What are examples of fixed and variable costs in a fast food restaurant?

A: Total fixed cost (TFC)is defined as those cost which a firm must pay irrespective of its level of…

Q: total revenue (TR) and total variable cost

A:

Q: With fixed costs of $400, a firm has average total costs of $3 and average variable costs of $2.50.…

A: Given:  Total Fixed Cost = 400. Average Total Cost = $3 Average Variable Cost = $2.50

Q: y has fixed costs of $10 per day and variable costs of $ 1 per loaf . Its oven can handle up to 50…

A: Total cost = Fixed Cost + Variable cost Average fixed cost = Fixed CostQuantity Average Variable…

Q: What are the fixed and variable costs of (a) a pizza shop, (b) an Internet service provider, (c) a…

A: There are various costs associated with the process of production and the main two categories of…

Q: After one month of operation, OO Café determined to shorten its business hours and close on…

A: The cost of production is the summation of all the costs incurred while producing a commodity in the…

Q: Using the figure above, what is the total cost for the firm?

A: Total cost is the summation of total fixed cost and total variable cost. The average total cost to…

Q: Ball Bearings, Inc., faces costs of production as follows:a. Calculate the company’s average fixed…

A: Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: find the quantity where ATC is at a minimum and find the quantity that is the most efficient…

A: Below is the given table:

Q: Explain how a firm is able to deal with both fixed and variable costs at the same time

A: Fixed cost is the cost of production which does not change or constant whatever the amount of good…

Q: Three college students are considering operating a tutoring business in economics. This business…

A: A) $9,000 (facility rent + insurance) B) $0.50 per hour (materials & supplies)

Q: What is the term for the rising portion of its marginal cost curve above its average variable cost…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: Melody Music Store has a total cost function of TC = 500 + 10Q + 5Q?. (a) Find the firm's fixed…

A: Total Cost is defined as the sum of Fixed Costs plus Variable Costs. Fixed Costs are those costs…

Q: The blue line on the following graph shows a firm's daily costs for the first 90 days of the fiscal…

A: The area of shaded region will be equal to area of triangle OAB minus area of triangle OCD

Q: Why do most fixed costs become variable costs in the long run?

A: Variable costs- Due to the sum of a product or service being generated, variable costs change. The…

Q: If a firm’s current revenues are less than its current variable costs, when should it shut down? If…

A: The firms have several things to look after, including the total costs, fixed costs, variable costs,…

Q: Explain average fixed cost (AFC)?

A: Costs are the sums of money spent by producers on various variables of production in order to…

Q: How is it possible to have positive accounting profit and negative economic profit concurrently?

A: Answer: Let us first understand the difference between accounting profit and economic profit.…

Q: In the diagram above, when the firm's Output (Q) is 20, Average Variable Cost (AVC) is: $17.50 $7.50…

A: Average variable cost refers to the per-unit total variable cost i.e. AVC = TC/Q

Q: Why is it reasonable to think of normal profit as a type of cost to the firm?

A: In the short run, firms usually try to temporarily shut down their operations when the prices are…

Q: The Wacky Widget company has total fixed costs of $100,000 per year. The firm's average variable…

A: Average fixed cost (AFC)=Total fixed costQ AFC=10000010000=10

Q: We expect the marginal cost to increase as this firm produces more computers. But when the firm…

A: Marginal cost (MC) is the change in total cost or total variable cost per unit change in output.

Q: How can I construct a cost curve for ATC, AVC, MC

A: Total Cost:The sum of explicit costs and implicit costs constitutes the total cost of the production…