Question 3 Discuss the relationship between Long-Run Average Cost and Short-Run Average Cost for a firm. Show this diagrammatically. What are the strategic implications of a Long-Run Average Cost curve showing existence of economies of scale?

Q: Explain the differences between diminishing marginal returns and diseconomies of scale.

A: Since the marginal return can be defined as the additional return by purchasing an additional…

Q: Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only…

A: Given: To Find: The short-run total cost if Ike's Bikes is currently producing 600 bikes: The…

Q: The long-run is a period of time long enough so that all inputs, including facility and equipment,…

A: PLEASE FIND THE ANSWER BELOW.

Q: Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the…

A: Formulas to be used:TC = VC+FCATC = TC/QAVC = TVC/QAFC = TFC/OMC = TCn - TCn-1

Q: Draw an example of the Total Fixed Cost, Total Variable Cost, and Total Cost of a company whose…

A: Total Cost: The term total cost refers to the sum of all the costs that are used in the production…

Q: QUESTION 2 The table below gives the short run production function for the firm, Jack's Moving…

A: By looking at the table, we want to input the correct amounts under Total Fixed Cost (TFC), Total…

Q: Please define the long cost curve and the short run cost curve in your own words but not more than…

A:

Q: Discuss some of the difficulties encountered in applying these economic concepts in practical…

A: The fixed cost is the cost which remains the same even when the firm produces nothing as output.…

Q: Discuss the connection between returns to scale and diminishing marginal product. Provide graphs to…

A: Definitions In the short run, increasing input after reaching maximum capacity while keeping at…

Q: Define the economies and diseconomies of scale and depict graphically how they relate to the long…

A: There are three types of returns to scale- Economies of scale The constant return to scale…

Q: Copy the table below into your answer booklet and fill in the missing figures: output total cost…

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…

Q: What is difference between fixed and variable cost in short run? How does this result in the classic…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: The figure illustrates the short-run cost curves for a company that produces cell phones Identify…

A: The total cost curve represents the relationship between total cost and the level of output. The…

Q: The total cost of producing 3 products is given by:   TC=2A+3B+4C+2ABC   1. Is the total cost…

A: The total cost (TC) function is a mathematical depiction of the total cost incurred by a firm to…

Q: ing to the long-run average cost cur

A: The cost of per unit output is known as the average cost. It directly depends on returns which…

Q: * 25 20 15 LRAC 10 5 10 15 20 25 30 Quantity (units per hour) Cost (dollars per unit)

A: Economies of scale occurs when LRAC decreases as quantity increases Diseconomies of scale occur when…

Q: ) Suppose we have the following production function: Q=K2/312/3. Does the technology have onstant…

A: The production represents the relationship between output and inputs. The change in inputs lead to…

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: Note: Plot your points in the order in which you would like them connected. Line segments will…

A: Approach to solving the question: The value for the short-run average total cost can be identified…

Q: Q1. If fixed cost (FC) is $50, variable cost (VC) is $100, and output (quantity) is 3, what is…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: a. Complete the following schedule, if the fixed cost = BD 700. (Note: you will receive full marks…

A: Here, output and total cost is given with the fixed cost of BD 700 and the formulas related to other…

Q: Economics students often confuse (a) diminishing returns related to the variable factors of…

A: The return to scale and economies of scale are two different concepts.  The law of diminishing…

Q: Define fixed and variable costs of production. Why do you think bigger firms may have lower average…

A: Net product costs are calculated by combining total direct resources and labor costs, and also total…

Q: The following table represents the potential monthly output (Q), number of workers (L), marginal…

A:

Q: 1) Use the graph to answer the question. Between points C and D, the long-run average total cost…

A: As per the guidelines answer is given to the first question. (1) "Long run average total cost curve…

Q: Explain why the red curve is an incorrect representation of a long-run average cost curve. Note: the…

A: The average cost is the called the per unit cost of production. The AC = TC/Q. The long run Average…

Q: How does the impact of fixed costs change production decisions in the short run and in the long run?…

A: Fixed cost refers to the cost which remains the same at each level of output. It means that fixed…

Q: 22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average…

A: Long-run average total cost (LRATC) is a business metric that addresses the average cost per unit of…

Q: Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be…

A: A firm's fixed costs are costs that do not change. It is irrespective of whether production or sales…

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.