Solution-Identify the range of output exhibiting increasing

Identify the range of output exhibiting increasing returns

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Reference no: EM133065615

You have collected the following data on output and total variable costs:

Q	TVC ($)
10	24,850
20	40,800
30	49,950
40	54,400
50	56,250
60	57,600
70	60,550
80	67,200
90	79,650
100	100,000

Identify the range of output exhibiting increasing returns (increasing MP), and the range exhibiting diminishing returns (decreasing MP).
Current fixed costs for the company equal $11,700. Draw two graphs, both with Q on the horizontal axis: one graph shows TVC and TC, and the other shows AVC, ATC, and MC.
Suppose that the government imposes a $6,750 property tax hike on all businesses; how will that affect your two graphs; i.e., which cost curves will be affected and how?
Suppose instead that the government considers your production process to be polluting, and imposes a $90 tax per unit produced (replacing the property tax in the previous question). How does this tax increase compare to the property tax increase, in terms of the effect on your company's cost curves?
Your boss says "either of these taxes is going to force us to change our production levels." Given what you know about optimization analysis, how would you respond?

Reference no: EM133065615

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Identify the range of output exhibiting increasing returns

Reference no: EM133065615

Reference no: EM133065615

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