CEE8813 Lecture 18

In the following D/D/1 queuing system, what is the queuing delay between 9:00-11:00 AM?

• A. 30K vehicle-hours

• B. 60K vehicle-hours

• C. 90K vehicle-hours

• D. 120K vehicle-hours

In the following D/D/1 queuing system, queue lengths are identical at 9:00 AM and 12:00 PM.

• True

• False

The figure shows the average cost (AC) and marginal cost (MC) curves of running a transportation service. Which of the following is true?

• A. Diseconomies of scale occur when output is greater than 40

• B. Profit is maximized when output is 70

• C. Economies of scale occur when output is less than 70

• D. All of the above

The figure shows the total cost (TC) curve of running a freight service. At point x :

• A. The average cost is lower than the marginal cost

• B. The average cost is higher than the marginal cost

• C. The system is experiencing diseconomies of scale

• D. Both (b) and (c)

The figure shows the average cost (AC) curve of running a service. Which of the following is not true?

• A. The average cost is decreasing indefinitely

• B. The marginal cost curve will never intersect the AC curve

• C. Such a service is unrealistic

According to the law of increasing returns to scale, what happens when inputs are scaled up proportionally?

• A. Output increases at a slower rate than inputs

• B. Output increases at the same rate as inputs

• C. Output increases at a faster rate than inputs

• D. Output remains constant regardless of input changes

What happens if marginal revenue (MR) is greater than marginal cost (MC)?

• A. Profit is maximized

• B. The operator can increase output to increase profit

• C. The operator can decrease output to increase profit

• D. Costs exceed revenue