The table below provides the output level and the longrun total cost in US$ of Moselewapula Limited, Montsamaisabosigo Limited, and Majakathata Limited: Longrun Total Cost (in US$) Quantity of Moselewapula Montsamaisabosigo Majakathata Output Limited 1 60 Limited 11 Limited 21 2 70 24 34 3 80 39 49 4 90 56 66 сл 5 100 75 85 6 110 96 106 IN 120 119 129 (a) Calculate the average total cost for each firm at each level of output. [✓] (b) Draw the longrun average total cost curves for the three firms using excel. (c) Do the three firms exhibit economies of scale or diseconomies of scale? Justify your answer using data. | (d) Explain any factor that could lead to firms suffering from diseconomies of scale and any factor that could lead firms enjoying economies of scale.
The table below provides the output level and the longrun total cost in US$ of Moselewapula Limited, Montsamaisabosigo Limited, and Majakathata Limited: Longrun Total Cost (in US$) Quantity of Moselewapula Montsamaisabosigo Majakathata Output Limited 1 60 Limited 11 Limited 21 2 70 24 34 3 80 39 49 4 90 56 66 сл 5 100 75 85 6 110 96 106 IN 120 119 129 (a) Calculate the average total cost for each firm at each level of output. [✓] (b) Draw the longrun average total cost curves for the three firms using excel. (c) Do the three firms exhibit economies of scale or diseconomies of scale? Justify your answer using data. | (d) Explain any factor that could lead to firms suffering from diseconomies of scale and any factor that could lead firms enjoying economies of scale.
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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