If a production function exhibits decreasing returns to scale, then the average variable costs are decreasing in the quantity produced.

Q: Marginal cost is the slope of both the average variable cost and the variable cost functions. Select…

A: Marginal cost is the change in total cost or total variable cost per unit change in output.

Q: Explain the difference between increasing returns to scale and economies of scale. In what way are…

A: The aim of any firm to maximize the profits.  To maximize the profits firm has to increase the…

Q: Ing fong TC = 8Q³ - 96Q² + 32Q Derive the expressions for marginal cost and average cost. What is…

A: Average cost: ‘average cost’ is the ‘total cost’ divided by the number of units of the good. It…

Q: For a production function at a given level of output in the short run, the marginal product of labor…

A: Marginal product of labor refers to the extra unit of output produced when an additional unit of…

Q: Does a relationship exist between increasing returns to scale and long-run average cost? Ex with the…

A: Economies of scale or increasing returns to scale are utilized conversely; both implies to a fall in…

Q: When the marginal cost curve lies below the average total cost curve, it is true that as output…

A: Answer to the question is as follows:

Q: The most likely explanation for economies of scale is

A: Economies of scale refer to the cost advantages that a business obtains due to expansion. It's the…

Q: For a short-run cost function which of the following statements is (are) not true?

A: The marginal cost function intersects the average variable cost function where the average variable…

Q: If a firm's average total costs decrease as it increases its scale of production, the firm is…

A: Economies of scale is when the increasing production decreases the average total cost.  Diseconomies…

Q: If a production function exhibits decreasing returns to scale, average cost will decrease as output…

A: Average cost is the per-unit cost of output.

Q: How do costs vary in response to changes in the quantity of a variable input? In your own words. 250…

A: In economics, the concept of costs and their relationship with the quantity of a variable input is…

Q: Diseconomies of scale exists over the range of output for which the long run average cost curve is?

A: Diseconomies of scale exists over the range of output for which the long run average cost curve is…

Q: Explain the general shape of the long run cost curves in relation to economies and diseconomies of…

A: The shape of long run cost curve changes depending on the returns to scale.

Q: Consider the following production function: Y = F(K, L) = A(2K+ 3L) Does this production function…

A: A production function shows constant returns to scale when doubling all the inputs results in a…

Q: Does this production function exhibit constant returns to scale? Using the marginal products you…

A: To evaluate if the production function displays consistent returns to scale, we must first see if…

Q: What is MC(y) for cost function c(y) = y3? Input prices are taken as constants.

A: Marginal cost measures the change in total cost with an additional unit of production.

Q: what is the fixed cost, marginal cost, average total cost, average variable cost and average fixed…

A: Total cost is the sum of fixed cost and variable cost.Fixed cost is the cost that doesn't changes…

Q: briefly explain returns to scale.  Explain the variable costs in the cost function

A: returns to scale allude to the rate by which result/output changes on the off chance that all…

Q: The cost function of a firm is given as C1 = 400 + 200 + 4Q" using this cost function what is the…

A: here we calculate the efficient scale of the firm by using the cost function so the calculation of…

Q: Show the relationship between production function and cost function

A: Production function refers to the quantities of a physical product to the quantity of factors of…

Q: What is the relationship between average variable cost and marginal cost? a) They are always equal…

A: Prior to diving into the connection between average variable cost (AVC) and marginal cost (MC), it's…

Q: Which of the following production function would exhibit increasing returns to scale? f(K, L) = (K +…

A: Production function shows the relationship between the inputs used and output produced. Constant…

Q: Which of the following production functions exhibits constant return to scale?

A: The production function exhibits constant returns to scale when there is a proportionate change in…

Q: Diminishing returns A cost function of the form C(x) = 1/2 x2reflects diminishing returns to scale.…

A: According to the question, C(x) = ½ X^2 AV(x) = C(x)/x           = ½ x MC(x) = C’(x)             =x

Q: a production function exhibits constant returns to scale, average cost will increase as output…

A: Production function, in financial matters, condition that communicates the connection between the…

Q: Calculate a cost function from a production function and explain how economic costs differ from…

A: The economic cost is the money value of all resources in the business. It also implies the…

Q: A farm producing wheat has the following production function Q = 4L + 3K. Does the above function…

A: Given, Q=4L+3K Production function shows the technical association between the input and output. It…

Q: Distinguish between economies of scale and constant returns to scale. What shape will the long-run…

A: Economies of scale – A downward sloping LARC (Long run average cost curve)The constant return to…