Question

6. A texibook publisher finds that at an output of 10000 books, its average fixed cost (per book) is 55. What would be the firm's average fixed cost if it increases its output to 15000 books? 7. The Unipro Company uses labour as its only variable input. Table 9.9 shows production data for Unipro. The wage rate is $5 per hour. (a) Compute total variable cost for the range of output indicated. (b) Compute Unipro's AVC for each level of output indicated. (c) Plot Unipro's AVC curve. 8. Table 9.10 shows short-run cost schedules for the production of t-shirts, using three different plant sizes. (a) For what output range should the firm use plant 1 ? (b) For what output range should the firm use plant 2?

Answer 1

For the first question:

The average fixed cost (AFC) is calculated by dividing the total fixed cost by the output quantity. Since the average fixed cost is given as $55 per book at an output of 10,000 books, we can use this information to determine the average fixed cost at an output of 15,000 books.

Given:

Output quantity at which AFC is $55: 10,000 books

AFC = $55 per book

To find the average fixed cost at an output of 15,000 books, we can use the same AFC value since it remains constant regardless of the output quantity. Therefore, the firm's average fixed cost would still be $55 per book.

For the seventh question:

Since you mentioned Table 9.9 for Unipro's production data, I would need the specific values and information from that table to compute total variable cost (TVC) and average variable cost (AVC) for each level of output indicated. Please provide the relevant data from Table 9.9 so that I can assist you accurately.

For the eighth question:

You mentioned Table 9.10 for the short-run cost schedules of t-shirt production using three different plant sizes. To determine the output range for which each plant should be used, I would need the information and data from that table. Please provide the necessary details from Table 9.10 so that I can help you determine the appropriate output ranges for each plant.

Explanation: