Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat? 2. Over what range of output is the farmer experiencing economies of scale? 3. Over what range of output is the farmer experiencing diseconomies of scale?

Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat? 2. Over what range of output is the farmer experiencing economies of scale? 3. Over what range of output is the farmer experiencing diseconomies of scale?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section8.4: Costs Of Production: Total, Average, Marginal

Problem 1ST

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Question

1. Which average total cost curve has the lowest average total cost of producing 30,000 bushels of wheat?

2. Over what range of output is the farmer experiencing economies of scale?

3. Over what range of output is the farmer experiencing diseconomies of scale?

4. Which average total cost curve has the lowest possible average cost of production?

5. Which average total cost curve represents the largest plant?

5
ATC1 ATC2
ATC3 ATC4
10
20
зо
40
50
Output (thousands of bushels per year)
Average total cost (dollars per bushel)
4.

Definition Definition Total cost of producing a certain quantity of a good, divided by the quantity produced. It is the sum of all costs (fixed and variable) required to produce one unit of output.

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