What is the value of avc at its minimum point

Assignment Help Macroeconomics
Reference no: EM13154729

EverKleen Pool Services has fixed costs of $3,500. The manager of EverKleen has estimated the following marginal cost function for EverKleen, using data for the last two years: SMC 125 0.42Q 0.0021Q2 where SMC is measured in dollars and Q is the number of pools serviced each summer. Each of the estimated coefficients is statistically significant at the 5 percent level.

a. Given the estimated marginal cost function, what is the average variable cost function for EverKleen?

b. At what output level does AVC reach its minimum value? What is the value of AVC at its minimum point?

c. Should the manager of EverKleen continue to operate, or should the firm shut down? Explain.

d. The manager of EverKleen finds two output levels that appear to be optimal. What are these levels of output and which one is actually optimal?

e .How much profit (or loss) can the manager of EverKleen Pool Services expect to earn?

f. Suppose EverKleen's fixed costs rise to $4,000. How does this affect the optimal level of output? Explain.

Reference no: EM13154729

Questions Cloud

Problem related to rules of debit and credit : Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner?
A federal report : A federal report find that a lie detector test given to truthful persons have a probability of 0.2 of suggesting that the person is deceptive. A company asks 12 job applicants to take a lie detect test. Suppose that all 12 applicants answer truthfull..
Prepare a stockholders equity section : Prepare a retained earnings statement for the year. (List multiple entries in descending order of amount.) Prepare a stockholders' equity section at December 31, 2008.
Substantial decrease in the amount of garbage : Many cities have experienced a substantial decrease in the amount of garbage being collected after they changes from levying a tax on each household to pay for the pickup to charging a fee for each bag or can picked up.
What is the value of avc at its minimum point : Given the estimated marginal cost function, what is the average variable cost function for EverKleen and at what output level does AVC reach its minimum value? What is the value of AVC at its minimum point?
Column of the income statement showing debits : The column of the income statement show the debits are equal to $56,899 and credits are $60,333. What do this information mean to the accountant?
Find sample size required if for margin of error to be less : Using the population standard deviation of 1.4 ounces, find the sample size required if we want our margin of error to be less than 0.25 ounces with 95% confidence.
What is the total pressure in mmhg of the mixture : A gas mixture contains helium and oxygen at partial pressures of 255 torr and 0.450 atm.What is the total pressure in mmHg of the mixture after it is placed in a container one-half the volume of the original container? (Temperature remains constan..
You roll 2 dice and consider the sum of the two : Suppose that you roll 2 dice and consider the sum of the two. Let A be the event of throwing odd, B be the event of throwing 4 or less and C be the event of throwing a multiple of 3.a) What is the sample space S and the corresponding probability of e..

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd