Economics

Total cost and total variable cost are parallel, yet average total cost and average variable cost are not parallel.

a. Demonstrate mathematically that ATC and AVC are not parallel.

b. Show mathematically that when both ATC and AVC are falling, ATC falls faster than AVC, and when both are rising, AVC rises faster than ATC.

  1. 0
  2. 8
asked by Catherine

Respond to this Question

First Name

Your Response

Similar Questions

  1. Economics

    1. The law of diminishing returns implies that at some output level: a) Marginal cost must fall b) Average total cost must diminish c) profit increases d) Marginal cost must rise e) Total cost must fall 2. The vertical distance
  2. Economics

    Suppose that a firm is currently employing 30 workers, the only variable input, at a wage rate of $60. The average product of labor is 30, the last worker added 12 units to total output, and total fixed cost is: $3,600. a. What is
  3. Economics

    Suppose that a firm is currently employing 30 workers, the only variable input, at a wage rate of $60. The average product of labor is 30, the last worker added 12 units to total output, and total fixed cost is: $3,600. a. What is
  4. economics

    A firm has fixed costs of $30.00 and variable costs as indicated in the table below. Complete the table. Instructions: Round your answers so that you enter no more than 2 decimal places. Total Product Total Fixed Cost Total
  5. Managerial Economics

    Suppose that a firm is currently employing 10 workers, the only variable input, at a wage rate of $100. The average physical product of labor is 25, the last worker added 10 units to total output, and total fixed cost is $5,000.
  6. Managerial ECON

    Suppose that a firm is currently employing 10 workers, the only variable input, at a wage rate of $100. The average physical product of labor is 25, the last worker added 10 units to total output, and total fixed cost is $5,000 a.
  7. Business

    At an activity level of 8,800 units, Pember Corporation's total variable cost is $146,520 and its total fixed cost is $219,296. For the activity level of 8,900 units, compute the following values. Required: A. The total variable
  8. economics

    For the total variable cost (TVC), draw a positive total fixed cost (TFC) and total cost (TC) curves. Then derive the associated marginal cost (MC), average total cost (ATC), average variable (AVC) and average fixed cost (AFC)
  9. Economics - Theory of the Firm

    If Average Variable Cost AVC = 10 + Q and P = 50. Find: Total Cost TC, Total Fixed Cost TFC, Total Variable Cost TVC, Average Total Cost ATC, Average Fixed Cost AFC
  10. Econ

    A firm faces the following Average Cost function AC=1500Q^-1 + 300-27Q+1.5Q^2 Calculate the output level that minimizes: a) Marginal Cost b)Average Variable cost I need some help on this question. Thanks. If the average cost is
  11. economics

    Teddy Bear, Inc., a rapidly growing manufacturer of high fashion children's shoes, plans to open a new production facility in Gastonia. Based on information provided by the accounting department, the company estimates fixed costs

More Similar Questions