# solution

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 \$25,000â€”\$7,000 for materials and \$18,000 for the mold. The mold can be reused to make additional whales, so additional whales would cost \$7,000 apiece.
a. Calculate the total cost and average total cost of producing 1 to 10 fake killer whales by filling in the table below.
Instructions: Enter your responses rounded to the nearest whole number.

 Quantity Total Costsof Mold (\$) Total Costsof Materials (\$) Total Costs(\$) Average Total Costs (\$) 1 18,000 7,000 25,000 2 3 4 5 6 7 8 9 10

b. Does production of fake whales exhibit diseconomies of scale, economies of scale, or constant returns to scale?

• Diseconomies of scale
• Constant returns to scale
• Economies of scale

c. What is the fixed cost of producing fake whales?
Instructions: Enter your response rounded to the nearest whole number.
\$
d. What is the variable cost of producing each fake whale?
Instructions: Enter your response rounded to the nearest whole number.
\$

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