(a) Define marginal rate of technical substitution. (b) "Returns to scale differ considerably across firms and industries." Explain this statement by differentiating between two different types of industries that are seen in real life and looking at the types of inputs (labor/capital) used.

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A: Total cost

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A:

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Q: 3. What are the differences between the internal and external economies of scale?

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Q: Refer to the above diagram. Diseconomies of scale?

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A:

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Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.