# Question #3: The authors of this study made the following assessment of production costs in the beef packing industry:

Question #3:

The authors of this study made the following assessment of production costs in the beef packing industry:

“Large plants have substantial fixed costs, due partly to capital intensity, and partly to labor practices (weekly minimum hours guarantees to production workers). As a result, short run processing costs at large plants rise sharply as volumes fall below capacity, and packers require large and consistent flows of cattle before committing to a large plant.”

To capture the idea that there are substantial fixed costs, suppose that the formula for the beef packers total cost is:

TC = \$50,000,000 + \$35 x Q

where Q is the number of cattle processed per year. This formula means that the fixed cost is \$50 million, but that once the plant is up and running, the marginal cost per cattle processed is \$35, regardless of the level of production.

a. Is this marginal cost curve from this cost formula consistent with the law of diminishing returns? Explain.

b. Using the formula for the total cost, what is the formula for the average total cost?

c. Is there a level of output for which the marginal cost equals the average total cost?

## 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:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
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.

### 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.

### 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.