You overheard Mr. John, the newly-hired marketing manager, saying: “I think our company should take advantage of economies of scale by increasing output, thereby spreading out our overhead fixed costs”. Would you agree with this statement? If not, provide a better description for “economies of scale”. Explain how they may be achieved by organizations. Highlight what would prevent them to occur.

Q: Explain the differences between diminishing marginal returns and diseconomies of scale.

A: Since the marginal return can be defined as the additional return by purchasing an additional…

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: Imagine yourself running a pizza restaurant over a short term horizon. Think about the following…

A: The amount of all costs brought about by a firm in creating a specific degree of result.

Q: Douglas Fur is a small manufacturer of fake-fur boots in Chicago. The following table shows the…

A: Average total cost (ATC) is calculated by dividing total cost by the total quantity produced.…

Q: In this week’s journal entry, you are asked to reflect on the concept of economies of scale. There…

A: Economies of scale refer to the cost benefits enjoyed by the company when it becomes more efficient…

Q: On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points…

A: Average costs will be costs per one unit of creation (per one set of boots, for this situation).…

Q: Please define the long cost curve and the short run cost curve in your own words but not more than…

A:

Q: describe economies and diseconomies of scale while explaining possible reasons for both situations…

A: As the production size increases, a firm may experience economies or diseconomies of scale.

Q: Identify and describe three examples of economies of scale and three examples of diseconomies of…

A: Companies benefit from economies of scale as their production becomes more productive. Economies of…

Q: Think about several different types of industries or markets and the amount of time it might take to…

A: The measure that depicts the size of business operations that are being measured by the maximum…

Q: 4. Various measures of cost Suppose the imaginary company of Panthera is a small, Cedar Rapids-based…

A: The cost of production is one of the most important concepts in economics. It is the total…

Q: Why does as output increases, average variable cost initially declines and eventually begins to…

A: In an economy, the cost is analyzed in different ways, such as total cost, marginal cost, average…

Q: Copy the table below into your answer booklet and fill in the missing figures: output total cost…

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…

Q: In 1796, Gottfried Christoph Hartel, a German music publisher, calculated the cost of printing music…

A: Please find the answer below.   FIXED COST: The term fixed cost refers to a cost that does not…

Q: a)In your own words, state and briefly explain two reasons that lead to economies of scale. 50 to…

A: Economies of scale occur when the business grows and it results in lower costs to the businesses and…

Q: Please see the attached two pictures, one for the graph, and the other for the questions.

A: In the third part of this question, which was uploaded in the previous link, there is a correction.…

Q: How could you explain the difference between economies of scope and economies of scale?

A: Economies of scope and scale are concepts that relate to the cost of production of firms.  Economies…

Q: Gap has too many 12,500 square feet stores. The target store size is 6,000 to 10,000 square feet, so…

A: Cost advantages accrue to companies when their production processes become more streamlined. By…

Q: Discuss whether economies of scale have any relevance to such companies as Wal-Mart

A: Economies of scale: When long-term average costs and output levels are inversely correlated, an…

Q: construct two graphs lined up one on top of the other. The upper graph should reflect a total cost…

A: Total cost is the sum of fixed cost and variable cost.

Q: Would you please tell me how the economies of scale can spread out the cost of production, so that…

A: Economies of scale are achieved when a business starts witnessing the cost reductions due to…

Q: “Only large firms tend to enjoy lower costs due to scale of production. Do you think large firms can…

A: Economies of scale are the advantages obtained by a company over cost due to the higher production…

Q: Distinguish between the short-run and long-run production decisions and illustrate their impact on…

A: Meaning of Production Function: The term production function refers to the situation under when a…

Q: Where average costs of production are lowest when all output is produced by a single firm

A: Average cost curve: It is a cost bend which is commonly U-shaped. Average variable cost (AVC) is…

Q: Explain how economies of scale and scope differ.

A: Key DifferencesScope of Application:Economies of Scale: Focuses on cost reductions achieved by…

Q: Douglas Fur is a small manufacturer of fake-fur boots in San Francisco. The following table shows…

A: Total cost (TC) at zero level of out is the total fixed at cost at each level of output. Thus, fixed…

Q: Imagine that you own your own business, or you are the manager of a company. Please provide concrete…

A: Fixed cost- It is not impacted by any change in the production or sale of goods.Variable cost- It…

Q: If marginal cost is less than average cost, average cost must fall when more units are produced.…

A: The marginal cost is change in total output when one additional unit of input is used.

Q: Consider the units of output, TFC, and TVC given in the following table. Units of output Total…

A: Units of output Total fixed cost (TFC) Total variable cost (TVC) Total cost Average fixed…

Q: Walmart is truly a behemoth in the retail industry; aside from Amazon, there are few competitors…

A: Firm W, a major player in the retail sector, is a prime example of the effectiveness of economies of…

Q: please answer part D. D: Are the average costs increasing, constant or decreasing in y? Are the…

A: Average cost = Total costQMarginal cost = ∂TC∂Q

Q: Economists define profit a bit differently than in accounting. In addition to explicit costs, we…

A: Total profit:Total profit means the total amount earned by a business. The profit is calculated by…