ECON 101 SEU Microeconomics Long Run Production of Bicycles Questions

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College of Administrative and Financial Sciences
Assignment-2
Deadline: 17/11/2020 @ 23:59
Course Name: Microeconomics
Student’s Name:
Course Code: ECON101
Student’s ID Number:
Semester: I
CRN:
Academic Year: 1441/1442 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
/ 5
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
•
The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
•
Assignments submitted through email will not be accepted.
•
Students are advised to make their work clear and well presented, marks may be reduced for
poor presentation. This includes filling your information on the cover page.
•
Students must mention question number clearly in their answer.
•
Late submission will NOT be accepted.
•
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
•
All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
•
Submissions without this cover page will NOT be accepted.
Assignment Questions
Maximum Marks-05
1) Consider the long-run production of Bicycles. The cost of the indivisible inputs used in the production
of bicycles is $6000 per day. To produce one Bicycle per day, the firm must also spend a total of $80
on other inputs-labor, materials, and other capital. For each additional bicycle, the firm incurs the
same additional cost of $80.
a) Compute the average cost for 30 bicycles, 60 bicycles, 100 bicycles, and 300 bicycles. (1 marks)
b) Draw the long-run average cost curve for 30,60,100 and 300 bicycles per day. (1 marks)
2) Draw a graph of perfectly competitive market and explain equilibrium of the firm by choosing output
level at which
a. P=MC=MR and Firm is making zero economic profit (1 Mark)
b. P=MC=MR and Firm is making a loss (1 Mark)
c. Explain shut down rule with the help of graph (1 Mark)
Answer:

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Explanation & Answer:
2 Questions

Tags:
microeconomics

competitive market

Economic Profit

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