To sketch the average and marginal cost curves

Assignment Help Microeconomics
Reference no: EM13197439

I'm asked to sketch the average and marginal cost curves of a software company, in which when it first starts up, the costs are extremely high.High start up costs, millions of dollar spent to make the software But after it has made the software, the costs in distributing it to customers "entails low incremental costs that is virtually zero". 

So should the MC and AC curves be U shaped or can they simply be sloping downwards because of the economies of scale?

How should the curve look like? 

Reference no: EM13197439

Questions Cloud

The base if the policy makers to determine the amount : How should policy makers determine the amount of money that should be allocated for research curing heart disease? they should base their decision on the value of the total benefit of research on curing other diseases or else.
How the expected return varies with beta : Draw a graph showing how the expected return varies with beta, what is the market risk premium and what is the required rate of return on an investment with a beta of 1.5?
How does the physiology of the ear contribute : Hertz is a linear scale of sound frequency. Pressure is a linear scale of sound intensity. The ear does not "hear" sounds in a linear fashion, rather it transforms them into a non-linear scale. How does the physiology of the ear contribute to this..
What is greatest event in human history since the invention : 1. From White's article list a few examples where man has changed his environment. 2. According to White what is the greatest event in human history since the invention of agriculture 3. According to White what was the greatest psychic revolution in ..
To sketch the average and marginal cost curves : Millions of dollar spent to make the software But after it has made the software, the costs in distributing it to customers "entails low incremental costs that is virtually zero".how should the curve look like.
Find the average velocity over the given time intervals : Find the average velocity over the given time intervals
Estimate the relative error in the calculated surface area : Estimate the relative error in the calculated surface area.
Difference of wacc based on market value : What is the difference of WACC based on market value weights and book weights - Please show formulas.A balance sheet shows a total of noncallable $45 million.
What is the marginal cost per bicycle : What is the marginal cost per bicycle?

Reviews

Write a Review

Microeconomics Questions & Answers

  Determine the goal of creating a brand name

Brand names can be important to the success of a firm in some industries. Consider industries that demonstrate monopoly, monopolistic competition, oligopoly, and perfect competition.

  What happens to the natural rate of unemployment

If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the ec..

  Effect of market shocks on equilibrium quantity and price

Briefly discuss whether this problem provides enough information to determine whether the equilibrium price and quantity of trucks increased or decreased.

  Finding equilibrium price and quantity

Industry supply and demand are given by QD = 1000 - 2P and QS = 3P. Determine the equilibrium price and quantity?

  What advice can you offer mcburger

How much revenue does McBurger currently earn based on the information above and is McBurger maximizing its revenues

  Describe the relationship between skill and unemployment

Use Human Capital theory and describe the relationship between skill and unemployment. Naturally, economists and the public at big usually think of skill level having having an inverse relationship with unemployment.

  What is a market structure

What is a market structure? Define and discuss in detail the differences between a monopoly, an oligopoly, perfect competition and monopolistic competition.

  Strategic behavior oligopolies

An interesting example of strategic behavior comes from the 1997 article regarding Microsoft's investment in Apple (New Straits Times, 1997). The article is included in Required Readings list.

  How would you prefer to receive your prize

You have won the lottery. There are two ways which you can receive your prize. You can either have 1 million in cash now, or you can have 1.2 million that is paid out as follows: $300,000 now, $300,000 in one year's time, $300,000 in two years' ..

  Determine qaly value

Suppose the recipient of a kidney transplant has stated that she would prefer 5 years of perfect health to the 10 years she expects to live with her transplant.

  Characteristics of market leaders and monopolies

IBM Company has a reputation for not necessarily making new technology, but acquiring relatively new firms with innovations and successful technology.

  Is the utility function monotonic

Obtain price elasticity of demand for good one. Obtain income elasticity of demand for good and find the amount of compensation needed for Hicks compensation

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd