Explain fully the law of diminishing returns. Does this occur in the short run or the long run? How does the law of diminishing returns explain the shapes of the MP, AP, MC and AVC curves?

Q: Does it make sense to consider the returns to scale of a production function in the short run?   A.…

A: Short Run Production Function shows the relationship between the Physical inputs and physical…

Q: Suppose you are production manager of a manufacturing company. Specify the name of your company…

A:

Q: Draw the production function graph illustration the three stages (diminishing returns) in the…

A: Incrementing returns, falling returns and negative returns are the three stages of production. The…

Q: Consider a production function Q=5K0.75L0.25 , target level of production=5000, cost of labor= 0.5…

A: As given Production Function is Q = 5K0.75L0.25 Cost of labor = 0.5 and rental cost is 0.10

Q: 2-lf you have the following production function Q=f( L,K), answer the following: 1. Is this function…

A: Given: Q=f(L,K)

Q: Space Market Adds new Supply (landlords) Demand (tenants) Development Industry If yes Rents &…

A: The housing sector is essential in a socioeconomic context because changes in property values can…

Q: Q: Theoretically and graphically explain how firm choose optimum combination of inputs in short run…

A: Answer: Assumptions:  Two inputs, Labor (L) and Capital (K) Price of labor, wage rate (W) Price of…

Q: Question 1. A production function is give by q=L0.7K0.5 (a) Find RTSLK and determine whether it…

A: The rate of technical substitution (RTS) is an economic concept used to describe the relationship…

Q: Carry out the following tasks to illustrate the law of diminishing returns: i. Deduce a production…

A: The production function determines all the input bundles that produce the same output level.The…

Q: production function Y=F(K,L) = 2K + VI . sa) Write its differential, dF(K,L). Consider the 54) Draw…

A: Given  Y=F(K,L)= L+2K

Q: Write a short note on Law of diminishing returns – implications for the short-run cost curve

A: Law of diminishing return to scale implies that as the number of a variable input is raised keeping…

Q: Suppose a soap-manufacturing production process is described by the following  equation: Y = a + b…

A: The marginal product of labor measures the change in output due to change in labor. Mathematically,…

Q: Labor Input (L) TPL APL MPL 1 7 2 18 9 11 3 30 10 12 4 44 11 14 62 12.4 18 6 78 13 16 7 88 12.57 10…

A: Output is done with labour variable input. The rise in output leads to fall in the marginal products…

Q: A 15 per cent increase in all inputs leads to only a 5 per cent increase in the output. Are the…

A: Percentage increase in input results to a less than proportionate increase in output is the known as…

Q: Present a graph of the following. Label your graphs completely 1.  Using the isoquant map and…

A: Isoquant:  Q=f(K,L) Q= Output L= Labor K= Capital Isoquant is the line which represents the same…

Q: The law of diminishing marginal returns _____.   a) is relevant in the short run. b) assumes all…

A: In economics, the expression "returns" alludes to the output produced contrasted with the inputs…

Q: In a relationship among total, average and marginal products, where TP is maximized:

A: The Total product (TP) implies the sum total of output produced using each nit of variable factor.…

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: Write T if the statement is True, and F if otherwise. 1. Isocost curves show the cost of the firm in…

A: An Iscost curve is a curve that implies a combination of inputs that a firm can buy to produce a…

Q: What is sunk cost? Provide an example of a sunk cost. Why are such costs irrelevant in making…

A: Costs refer to the expenses which are made by the firms in the production of goods, and services.…

Q: does the isoquant map look like if there are 1)continuously increasing returns to scale;…

A: The return to scale can be shown diagrammatically on a development way "by the distance between…

Q: Demonstrate the law of diminishing yields on a graph by drawing the relationships on TP, AP and MP…

A: The Marginal Product of an input indicates that the quantity of the variable factor changes in…

Q: A firm producing cars. The production function for shoes (Q) is: Q = K'² L2 where K is capital and L…

A: Given: Q=K1/2L1/2 Price of K=$8 Price of L=$2

Q: if the ATC curve is rising, does that mean the MC curve must lie above it? Explain.

A: Marginal Cost: The sum of the total variable cost is the marginal cost because the fixed cost…

Q: Output, Input in this diagram below, showing the relationship between a specific input and the…

A: Law of diminishing marginal returns means when we use one input keeping all other inputs constant…

Q: A firm faces the production function: q=10L^0.32 K^0.56  (a) What kind of returns to scale does…

A:

Q: 9. The MC curve cuts the AVC and ATC curves at A. O The falling part of each B. O Different points…

A: Business can be of various types. For example in diesel business, there is diesel production and…

Q: Use the diagram of production function to explain why variable costs increases at a decreasing rate…

A: Cost are of production two types: Variable cost and the Fixed cost. Variable cost is the cost that…

Q: Consider the following information about the input choices and prices, produci the same output in…

A: Cost minimization refers to optimal usage of factors of production such that for production of a…

Q: A firm's production function is characterized by the following production function: Q=L^(1/2)K^(1/4)…

A: Production function:Input price: Wage rate = 1, rent  = 4.Return to scale: "Return to scale" refers…

Q: When the ATC curve is falling, MC is ATC. less than greater than equal to

A: Total cost is the cost of producing all the goods.  Average total cost is the cost of production per…

Q: Demonstrate your understanding of the law of diminishing marginal returns.

A: Law of diminishing marginal productivity states that the marginal production from the additional…

Q: d. Does capital obey the "law of diminishing returns?" Explain. e. Suppose that firm wants to…

A: Given: Production function: Q=K1/2L1/2 Price of K=$8 Price of L=$2 Note: Due to multiple subparts…

Q: Do AC and AVC intersects each other?

A: Average cost measures the cost incurred by a firm per unit of output produced. Average variable cost…

Q: g. Now suppose that firm is faced with the same problem as in (e and f) except that firm has a fixed…

A: Given: Production function: Q=K1/2L1/2 Price of K (R)=$8 Price of L (W)=$2

Q: The period of a time when a firm is able to change all of inputs factors of production is called…

A: The period of time is important from the point of view of the producer, as time period limit his…

Q: Hi, can you please assist me with these? 1. What is the difference between production in the short…

A: please find the answer below.

Q: Cost curves in the long run differ from cost curves in the short run.   This is true right.

A: YES the statement that "Cost curves in the long run differ from the cost curves in the short run" is…

Q: 1.1 - A firm trebles its inputs and discovers that its output rises by a factor of four. This is…

A: 1.1                         Option (c) is correct. 1.2                         Option (b) is…

Q: An is a collection of input bundles that yield the same output level

A: An Isoquant is a collection of the input bindles that yield the same output level

Q: Why might marginal product be increasing at lower levels of output and decreasing at higher levels…

A: Marginal product (MP) is the extra output produced by one additional unit of input or raw material…

Factors of Production

Factors of production – in simple words means the factors that are used for producing any product or service. This includes the resources which are necessary for the manufacturing of products. Factors of production are also known as the building blocks of the economy.