As the level of production increases in the short-run, the Average Variable Cost (AVC) curve (increases continuously/first decreases and then increases/decreases continuously) and the Average Fixed Cost (AFC) curve (increases continuously/first decreases and then increases/decreases continuously).

Q: Cost Functions: A firm operates with a production function, y = 4√lk and input prices Pe = 6 and Pk…

A: A mathematical function that depicts the relationship between the input factors of production and…

Q: Assume that with 20L and 30K a given firm can produce 100 units of output and with 40L and 60K it…

A: Here, it is given that 100 units of output can be produced using 20L and 30K, while275 units of…

Q: Economies to scale refer to Select one: a. the point at which marginal cost equals average cost.…

A: "Long-run average cost curve is used to determine the scale of production process."

Q: Whenever a firm increases both its labor and capital by 2 percent, and as a result, output increases…

A: Economies of Scale:Economies of scale refer to the cost advantages that a firm can achieve when it…

Q: When average product increases, which short-run cost variable also changes? The output range over…

A: Marginal cost refers to the change in total cost with respect to change in output. Average total…

Q: ATC B. Output 15. In the above long-run average total cost curve the: A) movement from A to B…

A: Long run average cost curve represents least average cost to produce any given level of output. In…

Q: Define Economies of Scale, Diseconomies of Scale, Constant returns to scale.

A: Economies of scale: Economies of scale  are the cost advantage happens due to increase in…

Q: 1. Assume that a firm has the following production function: q = L0.5K0.6 a. Calculate output when L…

A: production function :q=L.5×K.6 output L=64 K=32

Q: The absolute value of the slope of a firm's isocost line is equal to the ratio of...

A: Isocost line is the line which shows different combinations of labor and capital, or any other two…

Q: Suppose a firm produces cars and the minimum efficient scale is 2,000,000 cars. The inputs are labor…

A:

Q: If there are diseconomies of scale within a given range of output, which of following is(are) TRUE?…

A: Diseconomies of scale are the cost disadvantages that occur when firms increase their scale of…

Q: 3. Many production functions have a property called constant returns to scale, about constant…

A: In economics, the term "returns to scale" refers to the quantitative change in output that a company…

Q: If all inputs triple and output increases by less than three times the original amount of output,…

A: Returns to scale is a concept that describes the relationship between changes in the scale of…

Q: When the firm's LRATC curve is downward sloping over its range of production, this implies that A.…

A: Long run average total cost curve shows the lowest cost for producing each quantity of output in the…

Q: 4. A firm has the following production function: Q = 50L + 6L² – 0.5L3 %3D (a) production function.…

A: Answer - "Thank you for submiting the questions.But, we are authorized to solve first sub parts…

Q: (a) Does this production function exhibit increasing, decreasing, or constant returns to scale?…

A: (a) The production function exhibits increasing returns to scale. This is because if we double the…

Q: I you know that when a firm produces 10 units of output, total costs are $1,030 and average fixed…

A: Fixed cost is a type of business expense that does not vary with changes in the quantity of goods or…

Q: The short run average variable cost curve Explain answer a. Is always downward-sloping b. Starts at…

A: Production cost is the cost occurred on factors of production used in the process of production.…

Q: Refer to Figure 1. Which of the short-run average cost curves correctly depict economies to scale?…

A: Long-run average cost The long-run average cost is tangent to the falling portion of the short-run…

Q: Q1. We classify Three Possible Long-Run Average Cost Curves for a Multiplant Firm; given the…

A: Here, given three graphs shows the difference nature of the long-run average cost curve of a firm.

Q: Consider the following long-run isoquants and inputs. In which case(s) is there increasing returns…

A: Increasing return to scale means output increases more than the increase in inputs…

Q: How would each of the following affect the firm's marginal cost (MC), average Variable East (Av…

A: Average Variable Cost (AVC): The average variable cost (AVC) of generating each unit of output is…

Q: How the shape of the total variable cost curve (TVC) and total cost curve (TC) is related with the…

A: Cost refers to the financial valuation of products and services purchased by manufacturers and…

Q: If a technology displays increasing returns to scale, then:   a. The ATC curve is increasing at an…

A: Returns to scale refer to how the output of a production process changes as all inputs are increased…

Q: The production function shows:   a. The level of output as a function of the quantity of inputs.…

A: The markets are considered to be place where the meeting, and interaction of the buyers of various…

Q: .ConsiderthsCobb-Dougas production function：Y=K"L".What does this function exhibit? a.Diminishing…

A: Given    Production function: Y=K"L" Increasing return to scale: If all inputs are increased by λ…

Q: A bakery has an average fixed cost per bun of $1 and average variable cost of $1.60 at current…

A: The short run is the period of time when there are both fixed and variable factors. Variable Cost…

Q: Diminishing returns occurs in the short run because: A.There are variable inputs to production in…

A: According to the law of diminishing marginal returns, the marginal product decreases as more and…

Q: Which of the following results from bureaucratic red tape, breakdown of top-to-bottom communication,…

A: The Diseconomies of scale are the consequence that occurs because of bureaucratic red tape,…

Q: Given the production function, the portion of the total product curve,  which is concave upward…

A: In an economyz production possibility curve shoes the trade-off between two products to be produced…

Q: The following question is referred to the following table Q28: Table Q28: Output, Fixed and Variable…

A: (By and large) fewer information costs. Outside economies of scale can likewise be acknowledged by…

Q: 1. Relation of A and T curves *3* As the level of production increases in the short-run, the Average…

A: As total fixed cost remains constant, the average fixed cost which is  TFC/Q keeps on decreasing…

Q: If a firm triples inputs and produces twice the output, then there are constant returns to scale.…

A: Return to scale is a long-run concept that states the proportional change in output due to a…

Q: 2. Derive the long run average total cost curve and show minimum efficient scale on it.

A: Total Cost curve(TC) is the cost that is incurred in the production of goods in firms. It consists…

Q: which of the following statements about the short-run production is true   A. Total product starts…

A: We have to find true statement of short run production function.

Q: Question A3 FC VC Bob runs a book-binding business, and the production of bound books requires two…

A: Returns to scale refers to the relationship between the scale of production and the resulting change…

Q: 4. A firm has production function q = KL. The wage and rental rates are both 10. Does this…

A: The production function is a concept in economics that describes the relationship between inputs and…

Q: Diseconomies of scale exist over the range of output for which the long-run average cost curve is a.…

A: The firms are considered to be the producers who work with the motive of earning maximum possible…