The short run is a time period such that O the existing firms in the market do not have sufficient time to change the amounts of any of the inputs that they employ. O the existing firms in the market do not have sufficient time to either increase or decrease their current rate of output. O the existing firms in the market do not have sufficient time to increase the size of their existing plant or build a new factory. O new firms may build plants and enter the industry.

The short run is a time period such that O the existing firms in the market do not have sufficient time to change the amounts of any of the inputs that they employ. O the existing firms in the market do not have sufficient time to either increase or decrease their current rate of output. O the existing firms in the market do not have sufficient time to increase the size of their existing plant or build a new factory. O new firms may build plants and enter the industry.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph shows the short-run average total cost curves for different plant sizes and the long-run average total cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost (ATC) curve and the long-run average total cost (LRATC) curve; for example, Q1 marks the point of tangency between ATC1 and LRATC. The orange point on ATC3 indicates the firm's current output level in the short run (Q4). ATC, ATC5 LRATC ATC2 ATC, ATC. Q, Q2 OUTPUT In the long run, if the firm decides to keep output at its initial level, what will it likely do? COST PER UNIT
A firm has a fixed production cost of $1,000 and a constant marginal cost of production of $700 per unit produced. What is the firm's total cost function? O A. TC = 1,000 + (700q) O B. TC = 1,000 + (700q). OC. TC = 700q. O D. TC = 1,000. The firm's average total cost (ATC) of production is O A. ATC = 1,000 + (700q). OB. 1,000 + (700q) ATC = Oc. 1,000 ATC = O D. ATC = 700q. O E. ATC = 700. If the firm wanted to minimize the average total cost, would it choose to be very large or very small? Explain. OA. very small because the average total cost of production rises with output. O B.- very large because the average variable cost of production falls with output. OC. very small because the average fixed cost of production rises with output. O D. very small because the total cost of production rises with output. O E. very large because the average total cost of production falls with output.
Suppose we have a firm in a perfectly competitive market. Assume that we have the usual shaped cost curves. At a market price of $15 the profit maximizing firm produces 53 units. Something changes that causes the firm to produce a quantity of zero at a price of $15 in the short-run. Which of the changes below can explain the change in the firm's behavior? O An increase in the fixed cost and a decrease in the marginal cost. O An increase in the fixed cost. O An increase in the marginal cost. O A decrease in the market price.
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Can you help me answer the question g ? Thanks!
3. Suppose you are the new Manager of Kramerica Korporation, a firm which makes large rubber bladders for oil tankers with two inputs, capital and labor. On your first day, you discover that the marginal product of capital is 1,500, the price of capital (rent) is $100, the marginal product of labor is 500 and the price of labor (the wage rate) is $50. Based on these numbers, a. Is Kramerica employing its two inputs optimally? Explain your answer. b. What would you do as the new Manager, and why? Be specific!
Econ 201. Name Assume that this is the cost function for a perfectly competitive firm: Cost (q) = 5 q' + 20 For this cost function, Marginal Cost = MC = 10 q . Fill in the table with your values from your cost function. Total Cost AVC AFC ATC MC 20 -- 1 3 3) For any cost function, you can find min A setting ATC = Land solving for q. Create a graph showing the minimum of function, Add AVC and MC to your graph. ) Here MC is always increasing. As q increa nappens to ATC when it is less than MC and w happens to ATC with is more than MC? At what level of production is AVC at its minimum? (the table you made is enough information for you to fin value.) For any price, will your firm always be able to cover its variable cost?