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Author Question: The manager of a company has been told by his engineers and cost accountants that the marginal cost ... (Read 42 times)

BRWH

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on: Jun 29, 2018
The manager of a company has been told by his engineers and cost accountants that the marginal cost of producing additional electronic wafers is likely to remain constant at a .50 each for the hundred thousand in production.
 
  Explain what the marginal cost function would look like and why. What is the slope of this cost function?

Question 2

Refer to Scenario 1 . What is the economic significance of 25 fish captured and 25 crabs captured?
 
  What will be an ideal response?


xthemafja

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The marginal cost function would be horizontal at a price of .50 . Since production costs don't change the slope of this function is zero.

Answer to Question 2

The economic significance of capturing 25 fish and 50 crabs is that the harvest would be inside the production possibilities frontier, which suggests some resource unemployment. That resource unemployment could be land, labor or capital. It could also be the result of an inefficient use of resources.


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