a. On Bonnies LRAC curve, what is the average cost of producing (i) 15 rides a day?
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a. On Bonnie’s LRAC curve, what is the average cost of producing
(i) 15 rides a day?
(ii) 18 rides a day?
b. Explain how Bonnie’s uses its long-run average cost curve to decide how many balloons to rent.
The table shows the production function of Bonnie’s Balloon Rides. Bonnie’s pays $500 a day for each balloon it rents and $25 a day for each balloon operator it hires.
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