ATCB.Output15.In the above long-run average total cost curvethe:A)movement from A to B reflectsdiseconomies of scale.B)movement from B to C reflectsdiseconomies of scale.C)realization of economies of scale wouldshift the entire curve downward.D)diminishing returns.movement from B to C reflects the law ofAverage cost

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

Answered: ATC B. Output 15. In the above long-run…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Using diagram, explain returns to scale and their influence on a firm's long-run average cost (LRAC). CS Scanned with CamScanner
In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then in this output range there are Select one: a. economies of scale b. increasing marginal returns c. diminishing marginal returns d. decreasing marginal costs e. diseconomies of scale
Diminishing returns A cost function of the form C(x) = 1/2 x2reflects diminishing returns to scale. Find and graph the cost,average cost, and marginal cost functions. Interpret the graphs andexplain the idea of diminishing returns.
In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits a. diseconomies of scale. b. efficient scale. c. economies of scale. d. constant returns to scale.
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Q = 100 1 74°F Clear 2 3 440 620 800 Q = 200 280 380 480 Average Total Cost (Dollars per bike) Q = 300 Q = 400 240 320 240 320 240 240 Q = 500 480 380 280 Q = 600 800 620 440 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $440 per bike. Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using one factory On the following graph, plot the three SRATC curves for Ike's Bikes from the…
If a Production Possibilities Frontier (PPF) of an economy is a linear curve, what does it means? А. The economy is facing constant opportunity cost The economy is facing decreasing opportunity cost C. The economy is facing a dynamic opportunity cost D. The economy is facing increasing opportunity cost B.
Joanne sells silk screened T-shirts at community festivals and craft fairs. Her marginal cost to produce one T-shirt is $3.50. Her total cost to produce 70 T-shirts is $305, and she sells them for $7 each a. Find the linear cost function for Joanne's T-shirt production b. How many T-shirts must she produce and sell in order to break even? c. How many T-shirts must she produce and sell to make a profit of $700? a. The linear cost function is C(x)= b. Joanne must produce and sell c. Joanine must produce and sell T-shirts in order to break even, because the number of T-shirts must be a whole number T-shirts to make a profit of $700, because the number of T-shirts must be a whole number
15. If the long-run average total cost is increasing as the output increases we call this: a. economies of scale b. diseconomies of scale c. constant returns to scale d. specialization
The downward-sloping segment of the long-run average cost curve corresponds to * diseconomies of scale. both economies and diseconomies of scale. economies of scale the decrease in average variable costs.
Marginal cost, average total cost and average variable cost Marginal cost and average total cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal. b. Marginal cost and average variable cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal.
The unlabeled red curves in this figure derive their shapes from: a. decreasing, then increasing, short-run returns. b. increasing, then decreasing, short-run returns. c. economies, then diseconomies, of scale. d. diseconomies, then economies, of scale.
Which of the following statements about average and marginal cost is INCORRECT? (2)(1) The marginal cost curve cuts both the average cost and average variable costcurves at their minimum points;(2) The marginal cost curve cuts both the average fixed cost and average variablecost curves at their minimum points;(3) The marginal cost curve lies below the average cost curve when average costis decreasing;(4) Marginal cost is the change in total cost when one extra unit of output isproduced.

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