Chapter 22: Q.e - For Critical Thinking (page 504)
If Tesla were to produce only a few dozen home batteries per month, would the company experience economies of scale or diseconomies of scale? Explain.
the company experience economies of scale
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Are the annual expenses that a shipper must incur to maintain its iBubble Wrap air pumps part of its fixed costs or of its variable costs?
Consider Figure 22-6. Suppose that the current scale of output for a typical firm facing this LAC curve, which applies to all firms in this industry, is between points A and B, at about 500 units per period. If a new firm entering the industry desires to produce at the minimum efficient scale, would it wish to produce 10 units per period, 500 units per period, or 1,000 units per period? Explain.
At its current short-run level of production, a firm's average variable costs equal per unit, and its average fixed costs equal per unit. Its total costs at this production level equal
What is the firm's current output level?
What are its total variable costs at this output level?
What are its total fixed costs?
If short-run average variable costs and marginal costs decline at every feasible quantity of output, what (if anything) happens to the positions of the AVC, AFC, ATC, and MC curves? Explain.
Given that hiring and paying asset-protection customer specialists at all stores will push up Walmart's labor costs, what is McMillon assuming about the cost savings that can be yielded by reducing Walmart's shrink?
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