Suppose that the cost of all inputs (both labor and capitol) decreases. What will happen to the long-run cost curve?

Q: A firm’s production function is given by q = min{M, L1/2}, where M is the number of machines and L…

A: Given production function q=min(M,L1/2) Price of Labor, W=1 Price of Machine, Pm=2

Q: When economist Jacob Viner first developed the envelope relationship, he told his draftsman to make…

A: The Long Run Average Cost (LAC) is calculated by dividing long run total costs by the amount of…

Q: Why will firms in most markets be located at or close to the bottom of the long-run average cost…

A: In the long run, all the costs are the variable costs. In long run, costs are lower than that of in…

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: Given the average-cost function AC=Q^2-4Q+174, find the MC function. Is the given function more…

A: Average Cost (AC) function is given as:

Q: Explain the relation between average variable cost and marginal cost for both the short-run and…

A: Cost Curves show the relation between the costs that a firm incur in the process of production and…

Q: oth in the short - run and the long - run , average cost curves are U - shaped for different reasons…

A: Average cost is the per unit cost incurred in the production of a commodity. It is obtained by…

Q: A firm’s total cost of production is given by TC=100q+100q^2. Are the returns to scale increasing,…

A:

Q: Provide a graph and an explanation to show that the production function Q = L.5K.5 has diminishing…

A: Meaning of Law of Variable Proportions: The term law of variable proportions refers to the…

Q: Economists describe short-run decisions as "constrained" decisions, while long-run decisions are…

A: The factors of production are the factors that are being used in the process of production by the…

Q: the short run, a firm's average variable cost will increase as its output increases because

A: The variable cost refers to the cost which changes with change in the level of output.  AVC = TVC/Q.

Q: In short-run production where labor is a variable input, the relationship between marginal product…

A: We are given, Economy is in short run. Labor is the variable input. Marginal cost of production =…

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: A manufacturer can produce 5,130 cell phones when a dollars is spent on labor and y dollars is spent…

A: Cost refers to all types of expenses that incur in the production process. It can be variable cost,…

Q: What are economies and diseconomies of scale? How do they arise? What do they imply for the shape of…

A: Long run average cost is the lower cost for the production of every unit. It comprises several short…

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: The production function in the image uses a variable amount of labor and a fixed a mount of capital…

A: Production function states the functional relationship among input and output produced. In the…

Q: Define and explain the difference between short run and long run and identify the relationship…

A: Short-run average cost curves: In the short run, the shape of the average cost curve is 'U' shaped.…

Q: Explain why an increase in the price of an input must typically cause an increase in the long-run…

A: As we know in long run , firms can increase both factors simultaneously and due to this firm…

Q: fall in the long-run cost curve

A: A cost curve which represents the minimum cost at which output can be produced in the long run is…

Q: Consider the following Cobb-Douglas production function: Y = 10L04K04. Suppose that the price of…

A:

Q: Show using math and logic that for constant returns to scale production functions, MRTS between…

A: Production function and productivity: The production function determines all the input bundles that…

Q: you assume that a firm has a U-shaped average cost curve, why would large and small firms have…

A: The economies and diseconomies of scale lead to the U shaped average cost curve.

Q: “Sunk cost is a fixed cost, but not in the long term.” Is this statement true or false? Explain!

A: In an economy, the cost is classified in different forms according to its effect on organizational…

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: Iyana's Pizzas is a takeout-only pizza parlor servicing the college campus of Urbana that…

A: The concept of diminishing production also referred to as the law of diminishing returns is an…

Q: Discuss in detail the law of diminishing returns and how it explains the shape of the short-run…

A: The objective of this question is to understand the law of diminishing returns and how it influences…

Q: Production Functions and Cost Functions in the short run and in the long run Consider the production…

A: Production function:  Price of capital (r) = 16 and price of labor (w) = $4.In the short run,…

Q: 1/3 1/3 Bridget's Widgets produces widgets with the production function, y=x1 x2, where x1 is the…

A: Production function: y=x11/3x21/3              ..... (1)Here x1 and x2 denote quantity of labor and…

Q: A firm produces identical outputs at two different plants. If the marginal cost at the first plant…

A: The firm seeks to maximize the profit. The profit is maximized where the MR=MC. Firm can use its…

Q: Is it true that in a short-run production process, the marginal cost curve eventually slopes upward…

A: No, It's not valid because the MC curve is usually upward-sloping, and there exists a decrease in…

Q: is it true that the marginal cost curve intersects the average variable cost curve at the break-even…

A: Marginal cost: It is the cost that is incurred by the firm to produce one extra unit. Average…

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…