Question

Use the following information to work Problem 6. The table shows the production function of Bonnie’s Balloon Rides. Bonnie’s pays $500 a day for each balloon it rents and $25 a day for each balloon operator it hires. Labor (workers per day) 10 20 30 40 50 Plant 1 6 10 13 15 16 Plant 2 10 15 18 20 21 Plant 3 13 18 22 24 25 Plant 4 15 20 24 26 27 Balloons 1 2 3 4 6.a. Graph the ATC curves for Plant 1 and Plant 2. Explain why these ATC curves differ. 6.b. Graph the ATC curves for Plant 3 and Plant 4. Explain why these ATC curves differ. 6.c. On Bonnie’s LRAC curve, what is the average cost of producing 15 rides and 18 rides a day? 6.d. Explain how Bonnie’s uses its long-run average cost curve to decide how many balloons to rent.

how do i graph this

Answer 1

To graph the ATC curves for Plant 1 and Plant 2, plot the average total cost (ATC) on the y-axis and the quantity of balloons on the x-axis. Use the information given in the table to find the ATC for each quantity of balloons for both plants. The ATC curves differ due to different levels of productivity and costs.

Step-by-step explanation:

To graph the ATC curves for Plant 1 and Plant 2, you need to plot the average total cost (ATC) on the y-axis and the quantity of balloons on the x-axis. Use the information given in the table to find the ATC for each quantity of balloons for both plants. Then, plot the points and connect them to form the ATC curves. The ATC curves for Plant 1 and Plant 2 differ because they have different levels of productivity and costs.