Economics 12th Edition by William Baumol, Alan S Blinder

Exercise 9

Suppose that wages are $20,000 per season per person and land rent per acre is $3,000. Calculate the average cost of 150,000 bushels and the average cost of 325,000 bushels, using the figures in Test Yourself Question 6. (Note that average costs increase when output increases.) What connection do these figures have with the firm's returns to scale