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navik [9.2K]
3 years ago
10

Mr. Hudson notes that if he produces 10 pairs of shoes per day, his average fixed cost (AFC) is $14 and his marginal cost is $8;

if he produces 20 pairs of shoes per day, his MC is $15. What is his AFC when output is 20 pairs of shoes per day
Business
1 answer:
zalisa [80]3 years ago
3 0

Answer:

Average fixed cost for 20 units = $7

Explanation:

<em>The fixed costs are cost are expenditures that do not vary with the activity level within a given range. Unlike variable costs, fixed costs are tend to be unaffected in the short run by amount of production work done or service rendered.</em>

The units produced will not have an impact on the total fixed costs but rather on the average fixed cost. The average fixed cost would become lower as the units produced increases.

Average fixed cost = Total fixed cost / Total units produced.

Hence , Total fixed cost = Average fixed cost × units produced

DATA

AFC - $14

Units - 10 units

Total fixed cost = 10 × 14 = $140

Average fixed cost for 20 units =Total fixed cost / Number of units

140/20 = $7

Average fixed cost for 20 units = $7

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b. small percentage changes in the price will lead to much larger percentage changes in the quantity demanded.

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Price elasticity of demand is a measure of how responsive is quantity demanded to change in price. Its formula is given by:

E_{D} = \frac{dQ}{Q}{\frac{P}{dP} =

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So when absolute value E_{D}  is greater than 1, a x percentage change in price will lead to larger than x percentage change in quantity demanded.

<u>Note</u>: Whether the percentage change in quantity demanded will be just a little or very much larger than percentage change in price will depend on how much E_{D} is larger than 1. But b is the still the best answer among the options.

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XYZ Company makes 400 widgets. The variable costs are $35.60 per unit and fixed costs are $30.00 per unit; however, $21.40 in fi
Anuta_ua [19.1K]

Answer:

increase in income  of $80

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Prepare an Analysis of Costs and Savings if the Company buys from Outside Supplier.

Note : The  fixed costs per unit at are unavoidable are irrelevant and disregarded in this decision.

<u>Analysis of Costs and Savings</u>

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Savings :

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Net Income effect                                      =           $80

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The effect on net income if the company instead buys the widgets is an increase in  income  of $80

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3 years ago
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Exchange rates are an effective way to analyze the price of one currency in terms of another currency with the tools of demand and supply.

<h3>What do you mean by exchange rate?</h3>

Exchange rates refer to the value of one's nation's currency over the currency of another nation.

An exchange rate can be fixed or free-floating. A fixed exchange rate is pegged to the value of other currency and a free-floating exchange rate may rise or fall due to changes in the foreign exchange market.

Thus, exchange rates are an effective way to analyze the price of one currency in terms of another currency with the tools of demand and supply.

Learn more about the exchange rate here:

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As a business customer, every time you buy a product or service, you are creating a record of that transaction. Group of answer
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True

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