How this affects the total-marginal and average cost curves

Assignment Help Business Economics

Reference no: EM131002386

Otto’s Autos buys cars for resale from the manufacturer at the price of $10,000 per car.

a. Assuming there are no other costs, draw Otto’s total, marginal, and average cost curves

b. Suppose Otto launches a new ad campaign that costs $100,000. On a separate graph show how this affects the total, marginal, and average cost curves.

C. Otto’s little brother and (minority shareholder) business partner, Ace, disagreed with the decision of the new ad campaign. He claims due to the increased expenses allocated towards the ad campaign, the optimal amount of cars produced by Otto’s Autos will decrease. Explain, using your answer from part B., why this claim is false.

Reference no: EM131002386

Questions Cloud

Compare the population means : Carry out a two-sample t test to compare the population means. What assumptions are required for this to be a valid test? At the α = 0.05 signi?cance level, what does this result imply about the null hypothesis?

Discuss the similarities and differences between organisms : An essay: Discuss the similarities and differences between organisms in the domains Bacteria and Archaea.

Explain how this is reflected in the accounting records : Explain how this is reflected in the accounting records if the shares are formally retired.

What could the government do to increase consumer spending : If the economy is operating at a point less than full employment (as it is now), what would we want to see happen to GDP? For right now, let's just look at the C (consumption) component of our GDP equation. What would we want to see happen to consume..

How this affects the total-marginal and average cost curves : Otto’s Autos buys cars for resale from the manufacturer at the price of $10,000 per car. Assuming there are no other costs, draw Otto’s total, marginal, and average cost curves. Suppose Otto launches a new ad campaign that costs $100,000. On a separa..

What is the concept or practice : What is the concept or practice (definition) and How would this concept or practice be applied typically in project management

How much work does a supermarket checkout attendant : How much work does a supermarket checkout attendant do on a can of soup he pushes 0.450 m horizontally with a force of 4.40 N? Express your answer in joules and kilocalories.

How much work does it take to slide a box : How much work does it take to slide a box 38 meters along the ground by pulling it with a 200 N force at an angle of 13o from the horizontal?

Always round tire finds the following cross elasticity : Always Round Tire finds the following cross elasticity:

User Account

All Pages