a. On Bonnies LRAC curve, what is the average cost of producing (i) 15 rides a day?

Question:

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. image text in transcribed

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Economics

ISBN: 9781292433639

14th Global Edition

Authors: Michael Parkin

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Question Posted: Jan 27, 2024 10:01 PM

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a. On Bonnies LRAC curve, what is the average cost of producing (i) 15 rides a day?

Question:

Labor (workers per day) 10 20 30 40 50 Balloons (number) Plant 1 6 10 13 15 16 1 Output (rides per day) Plant 2 Plant 3 Plant 4 10 15 18 20 21 2 13 18 22 24 25 3 15 20 24 26 27 4

Step by Step Answer:

Based on the information provided we can find Bonnies average cost AC of producing a certain level of output by factoring in the cost of balloons and ...View the full answer

Economics

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