As an employee of the Edge Corporation (a manufacturer of gas powered water pumps) you have been asked to determine the nature of their long-run cost structure. Below is cost data on the economic capacity output for 10 different plant sizes. $$\begin{array} { c c c c c }
\begin{array} { c }
\text { Quantity of } \
\text { pumps } \
\text { (thousands) }
\end{array} & \begin{array} { c }
\text { Total cost of } \
\text { labor }
\end{array} & \begin{array} { c }
\text { Total cost of } \
\text { tools }
\end{array} & \text { Total Cost } & \begin{array} { c }
\text { Average Total } \
\text { Cost }
\end{array} \
\hline 11 & \$ 192 & \$ 127 & \
12 & 200 & 136 & \
13 & 206 & 145 & \
14 & 210 & 150 & \
15 & 220 & 155 & \
16 & 240 & 160 & \
17 & 255 & 170 & \
18 & 280 & 188 & \
19 & 320 & 212 & \
20 & 365 & 235 & \
\hline
\end{array}$$ (a) Fill in the missing values in the table.
(b) Determine the range of output levels over which there exists economies and diseconomies of scale.
(c) Graph the firm's average total cost curve and describe how your answer to part (b) above relates to the shape of this curve.

Question

As an employee of the Edge Corporation (a manufacturer of gas powered water pumps) you have been asked to determine the nature of their long-run cost structure. Below is cost data on the economic capacity output for 10 different plant sizes. $$\begin{array} { c c c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { pumps } \
\text { (thousands) }
\end{array} & \begin{array} { c } 
\text { Total cost of } \
\text { labor }
\end{array} & \begin{array} { c } 
\text { Total cost of } \
\text { tools }
\end{array} & \text { Total Cost } & \begin{array} { c } 
\text { Average Total } \
\text { Cost }
\end{array} \
\hline 11 & \$ 192 & \$ 127 & \
12 & 200 & 136 & \
13 & 206 & 145 & \
14 & 210 & 150 & \
15 & 220 & 155 & \
16 & 240 & 160 & \
17 & 255 & 170 & \
18 & 280 & 188 & \
19 & 320 & 212 & \
20 & 365 & 235 & \
\hline
\end{array}$$ (a) Fill in the missing values in the table.
(b) Determine the range of output levels over which there exists economies and diseconomies of scale.
(c) Graph the firm's average total cost curve and describe how your answer to part (b) above relates to the shape of this curve.

Quizplus · Accepted Answer

The Answer of As an employee of the Edge Corporation (a manufacturer of gas powered water pumps) you have been asked to determine the nature of their long-run cost structure. Below is cost data on the economic capacity output for 10 different plant sizes. $$\begin{array} { c c c c c } 
\begin{array} { c } 
\text { Quantity of } \
\text { pumps } \
\text { (thousands) }
\end{array} & \begin{array} { c } 
\text { Total cost of } \
\text { labor }
\end{array} & \begin{array} { c } 
\text { Total cost of } \
\text { tools }
\end{array} & \text { Total Cost } & \begin{array} { c } 
\text { Average Total } \
\text { Cost }
\end{array} \
\hline 11 & \$ 192 & \$ 127 & \
12 & 200 & 136 & \
13 & 206 & 145 & \
14 & 210 & 150 & \
15 & 220 & 155 & \
16 & 240 & 160 & \
17 & 255 & 170 & \
18 & 280 & 188 & \
19 & 320 & 212 & \
20 & 365 & 235 & \
\hline
\end{array}$$ (a) Fill in the missing values in the table.
(b) Determine the range of output levels over which there exists economies and diseconomies of scale.
(c) Graph the firm's average total cost curve and describe how your answer to part (b) above relates to the shape of this curve.

As an Employee of the Edge Corporation (A Manufacturer of Gas