Determining fixed-marginal and average costs

Reference no: EM1371829

a) Consider a firm with total short-run cost function C=a+b.Q. New legislation means that it should pay an environmental tax which is the fixed sum, independent of whether it produces any output. How does this tax affect the firm's fixed cost (FC) marginal cost (MC) and average total cost (ATC)?

b) Now assume that the tax is proportional to the number that it produces. How does this affect the firm's fixed, marginal and average costs.

Reference no: EM1371829

Questions Cloud

Explain llc and mac : Explain two layers: LLC & MAC, and how are they different from what is available in TCP/IP protocol? Why do we require these two extra layers for LAN?

Calculate firm profit : Suppose you are the manager of a company that produces products X and Y at zero cost. You know that different types of consumers value your two products differently,

Draw and implement abstract base class : Draw and implement the abstract base class ArithmeticExpression which represent any binary (having two arguments) arithmetic expression.

Determine the optimal package price : The American Baker's Association reports that yearly sales of bakery goods last year rose 15%, driven by a 50% increase in the demand for bran muffins

Determining fixed-marginal and average costs : Consider a firm with total short-run cost function C=a+b.Q. New legislation means that it should pay an environmental tax which is the fixed sum, independent of whether it produces any output.

Calculate time weighted rate of return : A portfolio manager is being evaluated based on the time-weighted average rate of return. If the manager had achieved annual returns for the past three years of 2.5 percent, 14.5 percent and 9 percent on one initial investment of $500,000,

Draw an erd for initial entity list : Draw an ERD for initial entity list. Recognize a primary key for each entity and establish relationships as appropriate. Entity list for this purpose is as follows.

Explain you are expected to convey complex ideas : Explain You are expected to convey complex ideas in a clear, concise and organized fashion using the required and recommended readings from the course for analytical support.

Colleges and universities professor salaries : At several universities and colleges, business professors receive higher salaries than professors in others fields. Why might this be the case?

User Account

All Pages