Think about several different types of industries or markets and the amount of time it might take to change the scale of operation and the size of the production facility for each of these examples. The long-run is a period of time long enough so that all inputs, including facility and equipment, are variable, while in the short run at least one input is fixed. Think about how much time it would take to change the scale of operation for a restaurant, for an automobile plant, for a website designing company... Does it seem that the amount of time that separates the long run from the short run is industry-specific, rather than a set period of time? Share three specific examples
Think about several different types of industries or markets and the amount of time it might take to change the scale of operation and the size of the production facility for each of these examples. The long-run is a period of time long enough so that all inputs, including facility and equipment, are variable, while in the short run at least one input is fixed. Think about how much time it would take to change the scale of operation for a restaurant, for an automobile plant, for a website designing company... Does it seem that the amount of time that separates the long run from the short run is industry-specific, rather than a set period of time? Share three specific examples
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
- Think about several different types of industries or markets and the amount of time it might take to change the scale of operation and the size of the production facility for each of these examples. The long-run is a period of time long enough so that all inputs, including facility and equipment, are variable, while in the short run at least one input is fixed. Think about how much time it would take to change the scale of operation for a restaurant, for an automobile plant, for a website designing company... Does it seem that the amount of time that separates the long run from the short run is industry-specific, rather than a set period of time? Share three specific examples.
- Describe in detail how Diminishing Marginal Product arises from the assumption that some of a business's inputs are in fixed quantity over the period of time that is the short run. Often the convention is to assume that the business's production facility and the capital stock within it are the fixed factors of production in the short run. Inputs such as labor, and possibly some other supplies, are often assumed to be easier to adjust and therefore "variable" in the short run. The long-run then is whatever period of time is necessary for the firm to be able to vary all inputs. It may be helpful to use an example in your explanation of Diminishing Marginal Product.
- How would you represent the cost associated with the factors of production that cannot be varied in the short run? The total cost associated with these fixed inputs is referred to as Total Fixed Cost and mathematically is similar to a constant in the short run. Using the fact that Average Fixed Cost equals Total Fixed Cost divided by the quantity of output, explain how incurring a large fixed or "sunk" cost can be justified if a large amount of output is sold. Provide some examples of businesses and what might be some of their fixed costs. What would graphs of Total Fixed Cost and Average Fixed Cost as a function of output look like?
Hello, I need the right answers to these PLEASE
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education