Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![4. Explain why a firm's optimal short-run supply decision is to produce zero when p<minSAVC.
LK
5. Prove that the technology f(L,K) =
exhibits increasing returns to scale.
4
6. Define the following terms:
a. conditional factor demand function
b. isoquant
c. total cost function
7. Explain what is meant by the following statement:
"The long-run average cost curve is the lower envelope of the short-run average cost curves."
8. Given the following short-run total cost curve, derive the expression for the short-run average
variable cost curve:
STC(q)=16+8q+q²](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F015f74bb-4c5b-48fa-bfe3-225f4fce0e07%2Fe73ec8c2-f7e1-48e4-b2b7-eac405b9573b%2F4vnc32d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. Explain why a firm's optimal short-run supply decision is to produce zero when p<minSAVC.
LK
5. Prove that the technology f(L,K) =
exhibits increasing returns to scale.
4
6. Define the following terms:
a. conditional factor demand function
b. isoquant
c. total cost function
7. Explain what is meant by the following statement:
"The long-run average cost curve is the lower envelope of the short-run average cost curves."
8. Given the following short-run total cost curve, derive the expression for the short-run average
variable cost curve:
STC(q)=16+8q+q²
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