5. Your brother owns a painting company with fixed costs of $200 and the following schedule for variable cost: Quantity

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5 Your Brother Owns A Painting Company With Fixed Costs Of 200 And The Following Schedule For Variable Cost Quantity 1 (36.73 KiB) Viewed 35 times

5. Your brother owns a painting company with fixed costs of $200 and the following schedule for variable cost: Quantity of painted houses variable costs 1 $10 2 $20 3 $40 $80 5 $160 6 $320 7 S640 a. Calculate average total cost for each quantity. b. What is the efficient scale of the painting company? 6. Consider the following table of long run total costs for three 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 a. What is the difference between economies of scale and diseconomies of scale? Explain b. Does each of these firms experience economies of scale or diseconomies of scale and why? Show calculations to prove your answers.