ECON-2302: Chapter 7 (Production and Costs)

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was

$1

I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom, sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas, the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's average fixed cost to produce 8,000 specialty pizzas was

$2

I'MABigCorp. produces and sells kitchen wares. Last year, it produced 7,000 can openers and sold each one for $6. To produce the 7,000 can openers, the company incurred variable costs of $28,000 and a total cost of $45,000. I'MABIGCorp.'s average fixed cost to produce the 7,000 can openers was

$2.43

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

Diminishing marginal returns

In economics, a firm that faces no competitors is referred to as _________________.

a monopoly

The ______________ of all firms can be broken down into some common underlying patterns.

cost structure

When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.

economies of scale; a larger factory can produce at a lower average cost than a smaller company

The economies-of-scale curve is a long-run average cost curve, because

it allows all factors of production to change.

________________________ arises where many firms are competing in a market to sell similar but differentiated products.

monopolistic competition

Whatever the firm's quantity of production, _____________ must exceed total costs if it is to earn a profit.

total revenue


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