Answer the question on the basis of the following cost data for a firm that is selling in a purely competitive market. Total Output Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost
1 $150.00 $25.00 $175.00 $25.00
2 75 23 98 21
3 50 20 70 14,00
4 37.5 21 58.5 24
5 30 23 53 31
6 25 25 50 35
7 21.43 28 49.43 46.01
8 18.75 33 $1.76 68.07
9 16.67 48 55.67 86.95
10 15 39 63 128.97

1. Refer to the data. If the market price for this firm's product is $24, it will produce:

a. the law of diminishing returns.
b. the law of diminishing marginal utility.
c. diseconomies of scale.
d. economies of scale.

2. Refer to the above data. At 6 units of output, total fixed cost is and total cost is

a. $25; $50.
b. $50; $300.
c. $100; $200.
d. $150; $300.

3. Refer to the above data. At 3 units of output, total variable cost is and total cost is
a. $20; $70.
b. $60; $210.
c. $20; $210.
d. $60; $350.

True or false: a smart store layout moves customers in and out as fast as possible. a) true b) false

In each of the cases below, assume division x has a product that can be sold either to outside customers or to division y of the same company for use in its production process. the managers of the divisions are evaluated based on their divisional profits. case a b division x: capacity in units 200,000 200,000 number of units being sold to outside customers 200,000 160,000 selling price per unit to outside customers $ 90 $ 75 variable costs per unit $ 70 $ 60 fixed costs per unit (based on capacity) $ 13 $ 8 division y: number of units needed for production 40,000 40,000 purchase price per unit now being paid to an outside supplier $ 86 $ 74 required: 1. refer to the data in case a above. assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. a. what is the lowest acceptable transfer price from the perspective of the selling division? b. what is the highest acceptable transfer price from the perspective of the buying division? c. what is the range of acceptable transfer prices (if any) between the two divisions? if the managers are free to negotiate and make decisions on their own, will a transfer probably take place?

When gathering information about certain occupations, be sure to understand how you are paid. what is the difference between a salary and an hourly wage?