The GMC company is considering building a new car factory in China. The total (xed) cost of the investment is F = 4.

The GMC company is considering building a new car factory in China. The total (Öxed) cost of the investment is F = 4. When built, the factory will allow to produce y cars at the (variable) cost given byc(y) = 4y2 (4y squared)1a) Does the technology used in the new factory exhibit increasing, decreasing or constant returns to scale (ignore the fixed costs at this point)?b) Find a total costs (TC) of producing 1, 2 and 4 cars. In the graph (y;COST) plot a TC curve, and decompose it into a fixed cost curve and a variable cost curve by adding the two curves to your graph.c) Find the values of the average fixed cost (AFC) for three levels of production y = 1; 2 and 4: Plot a AFC curve in a separate graph. What happens to the AFC when production becomes very large (close to infinity) and when it is very small (close to zero). Explain.d) Find the values of the average variable cost AV C for y = 1; 2 and 4; and mark them in the graph from question c). Connect the three points to obtain the AV C curve.e) Find the values of the average total cost AT C for y = 1; 2 and 4 and mark them in your graph from c). Connect the three points to obtain the ATC curve. What are the values of ATC when the production is very small and very large? Explain which of the two components of ATC – AFC or AVC – dominates in each of the two extremes. Why?f) Find analytically the minimal efficient scale (MES), yMES;ATCMES for the considered car technology.g) Find analytically marginal cost MC curve. In a new graph plot the MC curve, together with the ATC, marking the MES.e) Explain intuitively why or why not the MC curve cuts or does not cut the ATC curve at the MES.f)Harder: find analytically a minimal efficient scale yMES;and ATCMES as a function of F (parameter). How do the two values depend on the level of F?

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10