Chapter Problem Sets WEEK 6 Betty Joe Conundrum is the presi

Chapter Problem Sets WEEK 6 Betty Joe Conundrum is the president of Menacing Faces, a company that manufactures injection molded rubber masks. The company is planning to demolish its old factory and to build a new one. An engineering study was conducted to determine production costs for three different factories. Total predicted monthly production costs (in $1,000s per month) for various output levels (in 1,000s of units per month) for each of the three factories are presented in the table below Use this information to solve Problems 6 to 8 Q TC (Plant i)TC (Plant 2) TC (Plant 3) 14 17 24 109 10 201 Caleulate long-run total, average, and marginal cost for Menacing Faces and enter them in the table below. Plot the total and unit cost values on the graphs that follow. 6. LTC LAC LMC 10

Solution

6

*Can do only one question . For solution to other parts please post as a different question.

Q	LTC	LAC	LMC
0	5	0.00
1	7	7.00	7
2	8	4.00	1
3	11	3.67	3
4	17	4.25	6
5	23	4.60	6
6	33	5.50	10
7	43	6.14	10
8	58	7.25	15
9	79	8.78	21
10	109	10.90	30
LTC is the cost of the plant for which cost of producing is minimum
LAC = LTC/Q
LMC = (LTC)n-1 -(LTC)n