1. Economies of scale exist over the range of output to units. Does the firm experience diseconomies of scale? If so, over what range of output? 2. a. Over what range of output does it experience constant long-run costs? Calculate the following costs: b. At 2,250 units of output, long-run average cost is $ ________, long-run marginal cost is $________, and long-run total cost is $________. c. At 2,400 units of output, long-run average cost is $________, long-run marginal cost is $________, and long-run total cost is $________. 3. the minimum efficient scale (MES) is ________units. In order to maximize profit, must the firm operate at MES?
1. Economies of scale exist over the range of output to units. Does the firm experience diseconomies of scale? If so, over what range of output? 2. a. Over what range of output does it experience constant long-run costs? Calculate the following costs: b. At 2,250 units of output, long-run average cost is $ ________, long-run marginal cost is $________, and long-run total cost is $________. c. At 2,400 units of output, long-run average cost is $________, long-run marginal cost is $________, and long-run total cost is $________. 3. the minimum efficient scale (MES) is ________units. In order to maximize profit, must the firm operate at MES?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
3
1. Economies of scale exist over the range of output to units. Does the firm experience diseconomies of scale? If so, over what range of output?
2. a. Over what range of output does it experience constant long-run costs?
Calculate the following costs:
b. At 2,250 units of output, long-run average cost is $ ________, long-run marginal cost is $________, and long-run total cost is $________.
c. At 2,400 units of output, long-run average cost is $________, long-run marginal cost is $________, and long-run total cost is $________.
3. the minimum efficient scale (MES) is ________units. In order to maximize profit, must the firm operate at MES?
Transcribed Image Text:160
120
Capital (K)
5
80
60
40
0
200
400 I
450
Q = 500
600
I
750
Labor (L)
800
Q = 1,500
Q = 1,000
1,000
Q = 2,500
-Q=2,000
1,200
1,375
Transcribed Image Text:Q
500
L
1500
K
200 40
750
1,000 300 60 30000
450
41,250
2,000 600 100
55,000
2,500
LTC
75
20000
125 68750
LAC
40
30
27.5
27.5
27.5
LMC
40
20
22.5
27.5
27.5
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