Sea lions have been depleting the stock of steelhead trout. One idea to scare sea lions off the Washington state coast was to launch fake killer whales, predators of sea lions. The cost of making the first whale is $19,000—$8,000 for materials and $11,000 for the mold. The mold can be reused to make additional whales, so additional whales would cost $8,000 apiece.
a. Make a table showing the total cost and average total cost of producing 1 to 10 fake killer whales.
b. Does production of fake whales exhibit diseconomies of scale, economies of scale, or constant returns to scale?
c. What is the fixed cost of producing fake whales?
d. What is the variable cost of producing fake whales?