1. "The concepts of short-run costs and long-run costs are relative-short run could mean a day, a month, a year, or even 10 years, depending on what you are looking at." Comment.
2. Describe the phenomenon that gives rise to learning curves. To what type of costs do learning curves apply?
3. Average cost calculations. Abs Health Club has the following cost equation:
Total Costs = $40,000 + $80n,
Where n = number of memberships.
- Calculate Abs's average fixed cost per membership when there are 1,000 memberships.
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What is the average variable cost per membership when there are 1,000 memberships?
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Calculate the average cost per membership when there are 1,000 memberships.