Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Chapter 11, Problem 1IP
To determine
Evaluate the given statement.
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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?
What is optimization? How does it blow up the myth about profit being a result of a mere increasedecrease interplay between cost and revenue?
How much should a firm sell of a particular product in order to maximize profit? What factor does it have to consider in arriving at this decision?
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Chapter 11 Solutions
Microeconomics
Ch. 11.1 - Prob. 1QCh. 11.1 - Prob. 2QCh. 11.1 - Prob. 3QCh. 11.1 - Prob. 4QCh. 11.1 - Prob. 5QCh. 11.1 - Prob. 6QCh. 11.1 - Prob. 7QCh. 11.1 - Prob. 8QCh. 11.1 - Prob. 9QCh. 11.1 - Prob. 10Q
Ch. 11 - Prob. 1QECh. 11 - Prob. 2QECh. 11 - Prob. 3QECh. 11 - Prob. 4QECh. 11 - Prob. 5QECh. 11 - Prob. 6QECh. 11 - Prob. 7QECh. 11 - Prob. 8QECh. 11 - Prob. 9QECh. 11 - Prob. 10QECh. 11 - Prob. 11QECh. 11 - Prob. 12QECh. 11 - Prob. 13QECh. 11 - Prob. 14QECh. 11 - Prob. 15QECh. 11 - Prob. 16QECh. 11 - Prob. 17QECh. 11 - Prob. 18QECh. 11 - Prob. 19QECh. 11 - Prob. 1QAPCh. 11 - Prob. 2QAPCh. 11 - Prob. 3QAPCh. 11 - Prob. 4QAPCh. 11 - Prob. 5QAPCh. 11 - Prob. 1IPCh. 11 - Prob. 2IPCh. 11 - Prob. 3IPCh. 11 - Prob. 4IPCh. 11 - Prob. 5IP
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- Joanne sells silk screened T-shirts at community festivals and craft fairs. Her marginal cost to produce one T-shirt is $3.50. Her total cost to produce 70 T-shirts is $305, and she sells them for $7 each a. Find the linear cost function for Joanne's T-shirt production b. How many T-shirts must she produce and sell in order to break even? c. How many T-shirts must she produce and sell to make a profit of $700? a. The linear cost function is C(x)= b. Joanne must produce and sell c. Joanine must produce and sell T-shirts in order to break even, because the number of T-shirts must be a whole number T-shirts to make a profit of $700, because the number of T-shirts must be a whole numberarrow_forwardIf a firm has economies of scale, it must have increasing returns to scale. True or false?arrow_forwardIf a firm has economies of scale, it must have increasing returns to scale. True or false? EXPLAIN IN DETAIL. NOTE THAT= NOT ONLY WRITE TRUE OR FALSE.EXPLAIN EVERY DETAIL LONG. EXPLANATION DOES NOT MEAN DESCRIPTION.arrow_forward
- Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as a result its output increases by 5%. a. What kinds of returns to scale is this company experiencing (decreasing, increasing, or constant)? Explain. B. That will happen to this firm's long-run average total cost as the output of cars increases?arrow_forwardCost curves in the long run differ from cost curves in the short run. This is true right.arrow_forwardFor an increase in output, average costs change by more in the short-run than in the long run, but for decrease in output, the opposite is true. True or false explain in detail.arrow_forward
- The long run is the period of time during which...arrow_forwardIf production increases, what happens to average variable cost (AVC), does it increase only, decrease only, or decrease, increase and then increase? _______________ choose onearrow_forwardThe cost curve for producing widgets passes through the following points and is piecewise linear in between. Solve, d. What is the incremental cost of producing the 100th widget? e. What is the incremental cost of producing the 500th widget?arrow_forward
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