# Suppose Rob is currently producing 1,000 hamburgers per month at a total cost of $100. What is...

## Question:

Suppose Rob is currently producing 1,000 hamburgers per month at a total cost of $100.

What is his average total cost of production?

## Average Cost of Production:

Producers have the role of determining the cost of production to ascertain whether the organization is running at a profit or loss. Notably, the production cost should be maintained at its lowest possible levels.

## Answer and Explanation: 1

The Average Total Cost (ATC) of production refers to the average cost per unit produced.

The formula is

ATC= Total Cost (TC) / Total Quantity produced (TQ).

ATC= TC/TQ

//

In this case,

TC= $100

TQ= 1000 hamburgers

Therefore

ATC= 100/ 1000

ATC= $0.1

The average costs of producing one hamburger is $0.1

#### Ask a question

Our experts can answer your tough homework and study questions.

Ask a question Ask a question#### Search Answers

#### Learn more about this topic:

from

Chapter 3 / Lesson 23Learn what is the average total cost. Learn its use, its formula, and how to apply it.

#### Related to this Question

- Find the exact cost and the approximate cost of producing the 2,000,001st burger considering the information below.
- Rick sells hamburgers, facing no competition the demand for his burgers is: Q=1000-2P, where Q is the quantity of burgers sold per week and P is the price of a given hamburger. Suppose Rick's monthly
- Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $4.00 in ingredients per pizza, $0.40 in electricity per pizza, $4,000 in restaurant per month, and $400 in insuran
- Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $2.00 in ingredients per pizza, $0.20 in electricity per pizza, $5000 in restaurant rent per month, and $500 in ins
- Giselle is starting up a Food Van where she sells burgers. a. What would be some implicit costs? b. What would be some variable costs?
- Demand for Wally's Wonderful Burgers is given as Q = 100 - 10P. His cost of production is given as total cost C(Q) = 30 + 4Q. If Wally is a profit maximizer, what will his profit from burger sales be?
- Pete can consume a total of 8 tacos and 0 hamburgers, or 0 tacos and 4 hamburgers for her weekly lunch consumption possibilities; the opportunity cost of one taco is: a. 1/2 hamburger, b. 1 hamburger, c. 2 hamburgers, d. 4 hamburgers, e. 8 hamburgers
- If Daniel sells 300 Big Macs at a price of 4.00, and his average cost of producing 300 Big Macs is 3.75, what are the profits?
- a. Suppose the price of hotdogs in years 1, 2, and 3 is $1, $2, and $3. The price of veggie burgers is $2, $3, and $4 for those years. The basket of goods is 4 hot dogs and 2 veggie burgers. Compute the cost of the basket for the first year. b. compute th
- Suppose the price of hot dogs in years 1, 2, and 3 is $1, $2, $3. The price of veggie burgers is $2, $3, $4 for those years. The basket of goods is 4 hot dogs and 2 veggie burgers. Compute the cost of the basket for the first year.
- Suppose honey is produced in a beehive using bees and sugar. Each honey producer uses one beehive which she rents for $30 per month. Producing q gallons of honey in one month requires spending 5q dollar bees and 2q^2 dollars on sugar. What is the average
- Suppose Carl's Candies sells 100 boxes of candy for $4 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a total profit of: a) $250 b) $2.50 c) $1.50 d) $150
- Samira has a monthly income of $200 that she allocates among two goods: meat and potatoes. a. Suppose meat costs $4 per pound and potatoes $2 per pound. Write the equation for her budget line and draw it. b. Suppose also that her utility function is given
- Suppose the local government imposes an annual lump-sum tax per plant. How would this affect the average fixed cost, average variable cost, average total cost, and marginal cost curves faced by a steel manufacturer?
- Given the table below. If farmer Jim desired to produce wheat at the lowest average total cost for each bushel, how many workers should he hire?
- Suppose that Laylita sells empanadas at a perfectly competitive farmers' market and that her total cost of producing empanadas is TC(q) = 40 + 0.1q^2 - 15q, where q is the total number of empanadas that she produces. Given this total cost function, her ma
- Assume that fixed costs are $10. What is the average total cost of 4 cakes? A. $25.00 B. $12.00 C. $35.00 D. $9.50
- Suppose a pizza parlor has the following production costs: $5 in labor per pizza, $4 in ingredients per pizza, $0.60 in electricity per pizza, $5,000 in restaurant rent per month, and $200 in insurance per month. Assume the pizza parlor produces 2,000 piz
- Suppose a country produces two final goods, Pizzas (Ps) and Tacos (Ts). In Year 1 it produced 10 Ps at a price of $5 each and 50 Ts at a price of $1 each. In Year 2 it produced 15 Ps at a price of $6
- Connie has a monthly income of $200, which she allocates between two goods: meat and potatoes. a) Suppose meat costs $4 per pound and potatoes cost $2 per pound. Draw her budget constraint. b) Suppose
- Use the following scenario to answer the following questions: Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger's minimum average total cost (ATC) is $3.75, and t
- Suppose a consumer has an income I = $48 which he/she spends on pizza (x) and tacos per month (y). The price of pizza is $8 and the price of tacos is $2. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month i
- Suppose a consumer has an income I = $150 which he/she spends on pizza and tacos per month. The price of pizza is $20 and the price of tacos is $10. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on
- Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger's minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50. Assume th
- The average total cost of producing six bagels is: \\ A. $0.10 B. $0.15 C. $0.20 D. $0.80
- Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. \\ \begin{matrix} \text{Number of Cakes Per Day} & \text{ Total Cost Per Day}\\ 0
- Suppose that Venezuela produces beef and oil and it can switch production between each at a constant rate. If the most beef it can produce is 600 million pounds and the most oil it can produce is 200 million barrels, then what is the opportunity cost of a
- Connie has a monthly income of $200 that she allocates between two goods: meat and potatoes. a) Suppose meat costs $4 per pound and potatoes $2 per pound. Draw her budget constraint. b) Suppose also
- Suppose that George Jefferson owns a corn farm. He currently has three tractors, each of which cost $4,000 a month to operate. He can hire workers to work on his farm, and he has to pay each worker $3
- An economics student was asked to create an average total cost table (ATC) for producing lobster dinners. This student constructed the following schedule for average total cost and output for lobster
- Chuck Diesel Burger is a food truck in Houston, Texas. Imagine that Chuck Diesel Burger's minimum average total cost (ATC) is $3.75 and that its minimum average variable cost (AVC) is $2.50. Assume there are no barriers to entry into or exit from the food
- 1. Assume that a rancher sells McDonalds a quarter-pound of meat for $1 and that McDonalds sells you a hamburger made from that meat for $2. What is the value included in GDP and why? 2. Assume that a
- Suppose honey is produced in a beehive using bees and sugar. Each honey producer uses one beehive which she rents for $30 per month. Producing q gallons of honey in one month requires spending 5 q dollar bees and 2 q^2 dollars on sugar. What is the total
- Suppose a consumer has a monthly income of m = 100, which she spends on two commodities: French fries (F) and beef jerky (B). The price of French fries is P_F = 2 and the price of beef jerky is P_B = 5
- Suppose a consumer has a monthly income of m = 100 which she spends on two commodities: french fries (F) and beef jerky (B). The price of french fries is p_f = 2 and the price of beef jerky is p_b =
- Shula's 347 Grill has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials,$4,080; hourly labor (variable), $5,200; rent (fixed), $1,700; depreciation, $800; and other fixed costs, $600. Each steak
- Consider the table below, which lists James's marginal utility schedule for steak and hamburger meals. Given a budget of $45, how many steak and hamburger meals will James buy per month to maximize hi
- Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. The baker business is competitive.A. Compute average fixed costs, average variabl
- The cost of producing ice cream is $1.20 per unit. The market sale is targeted as 1,000 units per month. What will be the monthly profit if the revenue is $2,200 per month? a. $1,500 b. $1,000 c. $1,2
- The Smythe chicken farm outside Little Rock, Arkansas, produces 25,000 chickens per month. Total cost of production at Smythe Farm is $28,000. Down the road are two other farms. Faubus Farm produces 55,000 chickens a month, and total cost is $50,050. Mega
- Suppose the federal government imposes a "stack tax" on the emission of air pollutants by steel mills. How would this affect the average fixed cost, average variable cost, average total cost, and marginal cost curves faced by a steel manufacturer?
- Suppose a consumer has an income of $900 per month and she spends her entire income each month on beer and bratwurst. The price of beer is $5 and the price of bratwurst is $4. Which of the following combinations of beer and bratwurst represents a point th
- How can fast food chains keep charging such low prices for hamburgers, year after year (ie.$0.99), when the price of beef has skyrocketed, and money has inflated?
- Inflation is expected to average 4% over the next 50 years. How much would you expect to pay 50 years from now for a burger costing $1.59 today?
- Market: hamburger Event: A new processing technology lowers the production cost of hamburger patties and the Surgeon General advocates eating 4 ounces of red meat per day. i.) What happens to the demand for hamburger? ii.) What happens to the supply of ha
- If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as ....................hamburgers. a. 5 b. 30 c. 15 d. 60
- If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to the GDP as hamburgers. A. 5 B. 15 C. 30 D. 60
- If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as hamburgers. a. 5 b. 15 c. 30 d. 60
- If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as ....................... hamburgers. a. 15 b. 5 c. 30 d. 60
- The cost of producing x fruit rolls at Mickie's Bakery is given by the function C(x) 2x +300. 1. Find the formula for C^{-1}(x) 2. What does the variable x represent in the function C^{-1}(x)? 3. What does the output of C^{-1}(x) represent?
- Suppose your restaurant sells cheese pizzas for $10 per pizza and your average total cost is $8.50 per pizza. Are you earning a profit at the restaurant? a. Yes, your profit is $1.50 per pizza, b. You are losing money, c. Yes, your profit is positive, but
- Suppose that the following equation represents the annual household demand for broilers. Q = 160 - 25P_1 + 10P_2 + 0.001I where Q is the annual pounds of broilers P_1 is the price/lb of broilers P_2 is the price/lb of beef I is the annual income Calculate
- Joey consumes three hamburgers at McDonald's. He figures out that the last hamburger he ate was just worth the price be paid for it. If the price of a hamburger is $1, a. he has a consumer surplus o
- Suppose a price-taking producer of barrels for storing wine has the following total cost schedule:
- Connie has a monthly income of $200 that she allocates among two goods: meat (M) and potatoes (P). a. Suppose meat costs $4 per pound and potatoes $2 per pound. Draw her budget constraint.
- George has $14 to spend on hamburgers and sodas. The price of a hamburger is $6 and the price of a soda is $2. Fill in the information in the following table and find the equilibrium. Can you afford this combination? Quantity of Hamburgers TU from Hambur
- Connie has a monthly income of $200 that she allocates among two goods: meat and potatoes. Suppose meat costs $4 per pound and potatoes $2 per pound. Draw her budget constraint.
- 1) Graph A: his income is $80, the cost of a CD is $2 and a cost of a burger is $2. 2) Graph B: his income is $120, the cost of a CD is $2 and the cost of a burger is $2. 3) Graph C: his income is $
- Assume that these fast food restaurants are now facing higher prices on the ingredients needed to produce their steak burger meals, and about the same time households in that area are finding it incre
- Suppose the price of sheet metal rises for producing cars. As a result, will average variable cost (AVC), average total cost (ATC) both rise or fall? Explain. With the price of sheet metal for making
- Ashley is currently consuming 10 hot dogs and 8 hamburgers a week. The last hot dog she consumed yielded 20 utils while the last hamburger she ate gave her 25 utils. If hot dogs cost $2 and hamburgers
- Consider a firm that operates in the perfectly competitive salmon farming industry. The short-run total cost curve is TC(Q)=400+2Q+0.5Q^2, where Q is the number of salmon harvested per month. a. What is the equation for the average variable cost (AVC)? b
- According to the table below, what will the average total cost (ATC) at 3 units of output? A. $500 B. $1,400 C. $700 D. $3,500 E. $1,167
- 3. Suppose we are studying the market for burgers. Bob is the sole provider of burgers in the market; he faces the following cost function: C(Q) = Q^2 + 9, and the following3. Suppose we are studying
- Kaile Cakes produces 10 cakes per day. The marginal cost of the tenth cake is $24, and the average total cost of 10 cakes is $6. The average total cost of 9 cakes is: a. $8 b. $5 c. $6 d. $4
- A) Suppose the Toyota facility in Detroit can produce 200,000 Camry cars during the year. On average, each Camry costs $12,000 to produce. Assume that Toyota can sell the Camry at $16,000. What is the
- Pat's Catering finds that when it caters 20 meals a week, its total cost is $6,000. If Pat has a total variable cost of $5,000, what is Pat's total fixed cost? A. $6,000 B. $50 C. $250 D. $1,000
- Kim hires students to clean houses at $450 a week. She leases equipment that costs $300 a week. The table gives Kim's total product and total cost schedules. At what output is Kim's average total cost
- Suppose that the only costs involved in car production are the cost of raw materials, the costs of buying robots, and the costs of hiring workers. Raw materials (steel, glass, rubber, textiles) cost $2,000 per car. Robots have an annualized cost of $1,400
- It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. The company's cost will be $50,009 if it produces an additional pound of steak. If the company produces 5,001 pounds of steak then: a) Its average cost is greater than its margin
- The total cost of producing two bagels is: \\ A. $0.10 B. $0.20 C. $0.40 D. $0.50 \\
- Suppose there are M farmers, each of whom has the right to graze cows on the village common. The amount of milk a cow produces depends on the total number of cows, N, grazing on the green. The revenue
- XYZ Hamburgers operates near a college campus. Stan of XYZ has been selling 120 hamburgers a day at $4.50 each and is considering a price cut. He estimates that he would be able to sell 240 hamburgers per day at $3.50 each. a. Calculate the price elastic
- Consider the table below, which lists James's marginal utility schedule for steak and hamburger meals. Given a budget of $45, how many steak and hamburger meals will James buy per month to maximize his total utility? What is the total utility realized?
- You can only consume two goods: hamburgers and smoothies. The price of each hamburger is $2.00 and the price of each smoothie is $1.00 and you have only $11 dollars to spend. [TABLE] 1. How do you allocate your budget? (What would you buy first, second, .
- A Hamburger company trying to find the maximizing sales quantity per day when its price of burgers is $6. The daily cost of making hot dogs is 3Q + (Q^2/20). What is the company's profit-maximizing sales per day and its profit amount per day? What if the
- Suppose a consumer spends $48 on pizza and tacos per month. The price of pizza is $8 and the price of tacos is $2 per unit. If the units of pizza consumed per month is on the x-axis and the units of tacos consumed per month is on the y-axis, which of the
- Consider the following cost item: Hamburger buns in a Wendy's restaurant. Determine whether the cost is fixed or variable with respect to the number of units produced and sold. Also, determine whether the item is a product cost or a period cost.
- Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market. The marginal cost is $3 per pound, the average variable cost is $2 per pound, and the beans sell for $3 per pound. Jerry: A. is maxi
- If the price of a hotdog is $2 and the price of a hamburger is $4, then 30 hotdogs contribute as much to GDP as [{Blank}] hamburgers. a. 5 b. 15 c. 30 d. 60
- Suppose Carlos has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If Carlos spends his entire $32 on coffee, he can buy _____ cups of coffee. If he spends his entire $32 on cereal,
- Mr. Krabs works diligently at the Krusty Krab in Bikini Bottom making Krabby Patties with his secret sauce. Assume the cost function is: TC = 100 + 2.5y + 0.05y^2. Based on this information, answer th
- A pizza business has the cost structure described below. The firm's fixed costs are $0 per day. What are the firm's average total costs at an output of 10 pizzas?
- Put meat on a horizontal and potatoes on a vertical axis. Suppose your income is $1000, prices of meat and potatoes are $10 and $20, respectively. Find the budget constraint equation, and draw the budget line. Explain what the two intercepts mean.
- If the price/MC is given, how do you find the total cost and output?
- Suppose that ranchers can buy up to a collective total of 200 cows and run them on the open range. The value of each cow after it has grazed is given by V= $2000-10C, where C is the total number of cows on the range. The cost of buying each cow is $1000.
- Suppose you estimate the following cost equation: AVC = 4832 - 0.5(Q) + 0.00007(Q)2 At what quantity is AVC minimized Suppose this firm sells 3500 units per month at a price of $4000.00 each and has
- Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 pe
- The average cost of producing 6 bagels is: \\ A. $0.10 B. $0.15 C. $0.20 D. $0.80 \\
- Suppose Rob, an avid golfer, spent a total of $1,800 on green fees for the 60 rounds of golf he played in 2014 and a total of $2,000 on green fees for the 50 rounds of golf he played (on the same cour
- Suppose a lawn-mowing business has a mower for which it paid $1000 and workers for which they pay $10 per hour. Suppose each mower can mow a lawn per hour. a) Their average fixed cost is $1000. b) T
- 1) What is the definition of average cost? 2) Determine the average cost in this scenario: You normally buy a crate of wine for $75. One crate has 8 bottles of wine. After a month, the store clerk in
- Suppose that the company Mama's Pies adds another store to sell its pastries. Supposed that it costs $400,000 to build the new store and assume that the new store will generate revenues of $450,000. W
- The average cost of making 10 cakes is $2.80. The average cost of making 11 cakes is $3.00. The marginal cost of the 11th cake is A. $0.20 B. $2.00 C. $3.00 D. $5
- Clearly explain the following statement: The owner of Joe's Burgers is thinking about building a second fast-food restaurant across town. The second restaurant would cost Joe $1 million to build. The owner, having more than enough money to build the new b
- The long-run total cost function for a firm producing skateboards is: TC = q^2 - 45q^2 + 900q, where q is the number of skateboards per week. Assume that MC = 3q^2 - 90q + 900. A) Find the average cos
- Suppose Andre is deciding how many employees to hire for his hat shop. He can sell each hat for $12. a. Fill out the following table. The values represent daily hat production. b. Suppose the hourly wage for these employees is $14/hour, and each employee
- Rob's income is $12 a month. The price of root beer is $3.5 a bottle, and the price of DVD is $3. What is Rob's real income in terms of root bear? What is his real income in terms of DVDs?
- Workers produce Iron Man statues according to Q=2L2-2L. Assume the statues sell for $20, and that labor costs $200. The optimal quantity of labor is how much?
- What rate of return per month will an entrepreneur make over a 2.5 year project period if he invested $150,000 to produce portable 12 volt air compressors? His estimated monthly costs are $27,000 with