Suppose a firm is producing in the long run. When it produces 2,000 units of output, its total cost is $6,000. When it produces 2,200 units of output, its total cost is $6,200, and when it produces 2,400 units of output, its total cost is $7,000.This firm is experiencing __________ returns to scale.- ○ increasing- ● decreasing then increasing- ○ constant- ○ increasing then decreasing- ○ decreasing

Correct : increasing then decreasing

Answered: Suppose a firm is producing in the long…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a firm that enjoys economies of scale. • If this firm wants to produce 25% more output, it expects its total cost to be [ Select] 1.25 of the initial cost. • If this firm wants to cut the output by 25%, it expects its total cost to decrease by V [ Select ] 25%. more than less than exactly
Using diagram, explain returns to scale and their influence on a firm's long-run average cost (LRAC). CS Scanned with CamScanner
Suppose a firm is producing in the long run. When it produces 2,000 units of output, its total cost is $6,000. When it produces 2,200 units of output, its total cost is $6,200, and when it produces 2,400 units of output, its total cost is $7,000. This firm is experiencing. returns to scale. Odecreasing constant Oincreasing then decreasing. O decreasing then increasing Oincreasing
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Q38
QUESTION 1 Consider the following cost function (with input prices taken as constants): c(y) =y. What is MC(y)? Oa. y313 O b.y? C. O d. 2y QUESTION 2 Consider the following cost function (with input prices taken as constants): c(y) = y. What is AC(y)? Oa. 3y2 Ob.y Oc. 2y3 Od.y313
K Suppose that a firm's production function is q=5x in the short run, where there are fixed costs of $1,000, and x is the variable input whose cost is $625 per unit. What is the total cost of producing a level of output q? In other words, identify the total cost function C(q). The total cost of producing ya level of output q is A. C(q)= 1,000. OB. OC. OD. OE C(q)= 1,000+ C(q)= 1,000+ C(q) = 1,000+ 625q² C(q)= 25 q² 25 625q² 25 0.5 q B Dollars per unit of output 2000- 1800- 1600- 1400- 1200- 1000- 800- 600 400- 200- a 12 14 10 Quantity nchack 18 (1) Incorrect
Consider the same firm from the Monday assignment but now let's call that cost schedule total variable cost. Q 1 2 3 4 5 6 7 8 9 TVC 12 20 24 28 34 42 52 64 78 And let's imagine that there is fixed costs of 18 which is sunk in the short run. a. Show this firm's average total cost, average variable cost and marginal cost on a graph. Indicate the efficient scale (I don't think the book uses the words "efficient scale" but it's the quantity where profit would be zero when P=MC. We will discuss what I mean by "efficient scale but probably not before Thursday. By "indicate" I mean give the quantity and MC. I don't need every point to be exactly to scale, I just care about the general shape of the curves, where things cross and the location and…
Question 39 If a store owner increases the size of his store producing more quantities of his product, and experiences constant returns to scale as a result, his long-run average total cost curve should be O increasing O decreasing O vertical O horizontal
If a firm experiences economies of scale over all relevantlevels of output, its long-run average total cost curve will: O slope downward O slope upward. be vertical O be horizontal.
If a firm quadruples(4x) in size and output triples (3x), what is the returns to scale? O A Increasing returns to scale O B O с O D Constant returns to scale Decreasing returns to scale Cannot determine

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