Average variable cost curve explanation

The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and average fixed cost (AFC) curve for Eleanor's Pizza Parlor when the retail price Eleanor pays for pizza sauce, including sales tax, is $15 per gallon. ATC AVC OUTPUT (Pizzas per day) Suppose the sales tax on pizza sauce is removed, so the price of pizza sauce decreases to $14 per gallon. In the following table, indicate how each cost and curve is affected, if at all. Cost Effect on Cost and Curve AVC AFC
pecreases, and therefore the curve shifts down Increases, and therefore the curve shifts up Is unaffected, and therefore the curve does not shift In the foll d, if at all Cost ATC AVC AFC
d, if at all. s unaffected, and therefore the curve does not shift Decreases, and therefore the curve shifts down Increases, and therefore the curve shifts up Cost ATC AVC AFC
In the following table, indicate how each cost and curve is affected, if at all. Increases, and therefore the curve shifts up CostIs unaffected, and therefore the curve does not shift ATC AVC AFC Decreases, and therefore the curve shifts down
business economics
0 0
Add a comment
Next >< Previous
Sort answers by oldest
Homework Answers
Answer #1
ATC: Decreases, and therefore the curve shifts down

AVC: Decreases, and therefore the curve shifts down

AFC: Is unaffected, and therefore the curve does not shifts down

Explanation:

Sales tax is a variable cost. The price of pizza sauce was $15. When tax is removed, the price is $14. It means the tax per gallon is $1. When tax is removed, the AVC will shift down. The tax reduction has no effect on AFC. So, AFC curve will remain unchanged.

ATC = AFC + AVC. since AVC curve shifts down keeping AFC curve unchanged, therefore, ATC curve shifts down.

3 2
Add a comment
Know the answer?
Add Answer to:
The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and...
Your Answer:
Post as a guest
Your Name:
What's your name?

What's your source?
What's your source?
Earn Coin
Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Post Your Answer
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
PLEASE ANSWER QUESTIONS CORRECTLY AND ANSWERS MUST BE CLEAR TO READ!!! THANKS!!!! 7. Cost-curve shifters The...
PLEASE ANSWER QUESTIONS CORRECTLY AND ANSWERS MUST BE CLEAR TO READ!!! THANKS!!!! 7. Cost-curve shifters The following graph shows the average total cost (ATC) curve, average variable cost (AVC) curve, and average fixed cost (AFC) curve for Kyoko's Pizza Parlor when the retail price Kyoko pays for pizza dough, including sales tax, is $5 per large pizza. AVC 0: AFC OUTPUT (Pizzas per day) Suppose the sales tax on pizza dough is removed, so the price of pizza dough decreases...

attempts: C D Keep the Highest: /1 L2. Shifts in cost curves The following graph shows...
attempts: C D Keep the Highest: /1 L2. Shifts in cost curves The following graph shows the average total cost curve (ATC), average variable cost curve (AVC ), and average fixed cost curve (AFC) for Kate's Pizza Parlor when Kate pays her workers a wage of $15 per hour. a PRICE Dollars per OUTPUT Pumper day Suppose the wage Kate pays her workers increases to $20 per hour In the following table, indicate how each curve is affected, if at...

Describe the shape of AFC(average fixed cost), AVC(Average Variable cost), ATC(Average total cost) and MC(Marginal cost)...
Describe the shape of AFC(average fixed cost), AVC(Average Variable cost), ATC(Average total cost) and MC(Marginal cost) Explain graphic relationship among ATC, AVC and MC. I would be appreciated if the answered in 5senteces,

Indicate the effect that each of the following conditions will have on a company's average variable cost (AVC) and average total cost (ATC) curves: a
Indicate the effect that each of the following conditions will have on a company's average variable cost (AVC) and average total cost (ATC) curves:a. The movement of a company's administrative offices from New York City to New Jersey where rent costs are lower.b. The use of two work shifts instead of three in a manufacturing plant.c. An agreement reached with the labor union in which wage increases are tied to productivity increases of the workers.d. The elimination of sugar quotas.e....

1. Which of the following must be true when average total cost is decreasing? Average fixed...
1. Which of the following must be true when average total cost is decreasing? Average fixed cost is increasing. Average variable cost is constant. Marginal cost is lower than avergae total cost. Marginal cost is decreasing. 2. Which of the following is true? AVC=ATC+AFC. AFC will go up in the beginning but will eventually go down. MC= (change in TC)/ (change in Q) FC+MC=TC. 3. Which of the following is true? Average product (AP) is increasing when the marginal product...

Calculate A) Total Fixed Cost (TFC), Total Variable Cost (TVC), Average Fixed Cost (AFC), Average Variable...
Calculate A) Total Fixed Cost (TFC), Total Variable Cost (TVC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Average Total Cost (ATC), and Marginal Cost (MC). B) Graph the average fixed cost (AFC), average variable cost (AVC), average total cost (ATC), and the marginal cost (MC) curves on one graph and TFC curve, TVC cost curve, and TC curve on another graph. Quantity Produced Total Cost 0 $ 120 1 135 2 148 3 159 ...

ATC AVC The figure above represents a firm's marginal cost, average variable cost, and average total...
ATC AVC The figure above represents a firm's marginal cost, average variable cost, and average total cost curves. The firm operates in a perfectly competitive market. Copy this figure into your assignment and indicate the firm's short-run market supply curve.

The top graph below shows the marginal cost (MC), average variable cost (AVC), and average total...
The top graph below shows the marginal cost (MC), average variable cost (AVC), and average total cost (ATC) curves for an individual firm in a competitive commercial ridesharing market where the price has stabilized. In the blank graph below it, use the straight-line tool to draw the long-run market supply curve as a line from one edge of the graph to the other.

Question 2 [6 points] Afirm's average cost curves are shown below 120 AFC 105 ATC 90...
Question 2 [6 points] Afirm's average cost curves are shown below 120 AFC 105 ATC 90 75- 60 45 30 15 0 6 Labour (workers per day) a) The marginal cost curve first declines and then increases because of Constant marginal revenue The decline in the gap between ATC and AVC as output expands Increasing. then diminishing, marginal utility Increasing, then diminishing. marginal retuns b) The vertical distance between ATC and AVC measures Average fixed oost Economic profit per unit...

Output Total Cost Fixed Cost Variable Cost AFC AVC ATC MC 0 50 1 130 2...
Output Total Cost Fixed Cost Variable Cost AFC AVC ATC MC 0 50 1 130 2 190 3 230 4 250 5 310 6 400 7 540 8 800 9 1200 The market supply curve is the sum of the marginal cost curves of all the firms in the market. The market supply of a competitive industry is determined by:

Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
Share Your Knowledge
Post an Article

Post an Answer

Post a Question with Answer

Earn Money
Contribute Homework Answers
($1+ Per Post)

ADVERTISEMENT

Recent Questions
Recent Answers
Sarah is looking to invest in bonds, she is going to invest for a pool of...
asked 4 minutes ago
Linear algebra
asked 7 minutes ago
Problem 6. (10 pts) Write down the following in the form of x(t) = A cos(2t...
asked 7 minutes ago
Please ,determine V1, V2 and V3 for the circuit below (assume ideal diodes)!
asked 49 minutes ago
Using C programming Using the supplied example code as a starting point, add 3 more conversions...
asked 48 minutes ago
Suppose that the central bank observes a drop in real GDP. If it believes that GDP...
asked 50 minutes ago
electromagnetism
asked 54 minutes ago
50. Two boxes A and B, are connected to the ends of a light vertical cord,...
asked 1 hour ago
The top and bottom surfaces of a metal block each have an area of A =...
asked 1 hour ago
C++
asked 1 hour ago
ADVERTISEMENT
Back to top
About
Contact
Terms of Use
Privacy Policy
Academic Honesty Policy
Paper Writing Service
Free Writing Tool
Homework Answer Scanner App
© 2013-2021 HomeworkLib.com

user contributions licensed under cc by-sa 4.0

I1.13ML0LD21.1KI439KRank12.3Kln/awhoissourceRank24.5KAdv Disp Ads0More dataSummary reportDiagnosisDensity383n/a
0
SHARES