Use the following statements to answer this question: 1. The long-run average cost (LAC) curve is the envelope of the short-run average cost (SÁC) curves. II. The long-run marginal cost (LMC) curve is the envelope of the short-run marginal cost (SMC) curves. O A. I and II are true. B. I is true, and II is false. C. I and II are false. O D. Il is true, and I is false.

Use the following statements to answer this question: 1. The long-run average cost (LAC) curve is the envelope of the short-run average cost (SÁC) curves. II. The long-run marginal cost (LMC) curve is the envelope of the short-run marginal cost (SMC) curves. O A. I and II are true. B. I is true, and II is false. C. I and II are false. O D. Il is true, and I is false.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 4SQ

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What is a long-run average cost curve?
Question 6 Use the following statements to answer this question: 1. The long-run average cost (LAC) curve is the envelope of the short-run average cost (SAC) curves. II. The long-run marginal cost (LMC) curve is the envelope of the short-run marginal cost (SMC) curves. A) I is true and II is false. B) II is true and I is false. C) I and II are false. D) I and II are true.
Use the following two statements to answer this question: 1. The average cost curve and the average variable cost curve reach their minima at the same level of output. II. The average cost curve and the marginal cost curve reach their minima at the same level of output. Both I and II are false. I is true, and II is false. O Both I and II are true. Olis false, and II is true.
Marginal cost, average total cost and average variable cost Marginal cost and average total cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal. b. Marginal cost and average variable cost are always equal. Do you agree? Explain. If you disagree then write under what situation they are equal.
How would each of the following affect average total cost, average variable cost, and marginal... Question: How would each of the following affect average total cost, average variable cost, and marginal cost? A. An increase in the cost of the lease of the firm's building. B. A reduction in the price of electricity. C. A reduction in wages. D. A change in the salary of the president of the company.
If average total cost is increasing as output increase, then marginal cost must be average total cost. Select one: a. equal to b. less than c. greater than d. not enough information to make a decision. One important concept we learned this semester is the relationship between productivity and cost. We learned that average variable cost and the average product of labor have a relationship, ceteris paribus. Select one: a. fixed or constant b. all of the above c. inverse O d. positive
Which of the following statements correctly explains the average cost and the marginal cost of production? a. Marginal cost is equal to the profit- maximising price set by a firm that produces a differentiated good. b. Average cost is the vertical intercept of the total cost curve. C. Marginal cost is calculated as the total cost divided by the quantity d. Average cost is at its minimum when it is equal to marginal cost. e. Marginal cost is always higher than average cost.
Which one of the following statements about a firm’s cost curves is true? A. The average variable cost curve only includes explicit costs. B. Increases in input prices for variable factors of production will shift the firm’s marginal cost curve up and also shift the firm’s total variable cost curve up. C. Fixed costs only include implicit costs. D. An increase in the price of a fixed factor of production will shift all of the firm’s cost curves up. E. A competitive firm’s short run supply curve is always identical at all points to its short run marginal cost curve.
Both in the short - run and the long - run , average cost curves are U - shaped for different reasons . Explain
Explain the relation between average variable cost and marginal cost for both the short-run and long-run. Describe how the graphs of the cost functions look as part of your response.
Which of the following statements is false? a. The long-run average-total-cost curve does not connect the minimum points of each of the short-run average-total-cost curves. b. The long-run average-total-cost curve shows the minimum cost of producing each level of output when all resources are variable. c. The short-run average-total-cost curve shows the minimum costs of producing each level of output when at least one input is fixed. d. If short-run average-total-costs are declining, then economies of scale exist. e. None of the above.
What factors account for a fall in the long-run cost curve?