Does each of these firms experience economies of scale or diseconomies of scale?       Explain.

1.(0.2 pt) If the government imposes a $1,000 per year license fee on all pizza

restaurants, both the _________________________ cost curve and

the _________________________ cost curve would shift as a result.

 

2. (1.5 pt) Fill in the table below. (Make sure to show all your work.)

 

Output	Fixed Costs	Variable Costs	Total Costs	Average Fixed Costs	Average Variable Costs	Average Total Costs	Marginal Costs
0	$40	$0
1	$40	$10
2	$40	$18
3	$40	$25
4	$40	$35
5	$40	$47
6	$40	$60
7	$40	$75
8	$40	$95
9	$40	$120
10	$40	$150

 

 

3. (0.3 pt) Consider the following table of long-run total costs for 2 different firms:

 

Quantity	1	2	3	4	5	6	7
Firm A	$60	$70	$80	$90	$100	$110	$120
Firm B	$11	$24	$39	$56	$75	$96	$119

 

Does each of these firms experience economies of scale or diseconomies of scale?

Explain. (Make sure to show all your work.)