Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter 7, Problem 15SQ
To determine
The decreasing portion of a firm's long run average cost curve and its implication.
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Diseconomies of scale exist over the range of output for which the long-run average cost curve is
a. constant.
b. falling.
c. rising.
d. none of the above.
In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of $9,200, then in this output range there are
Select one:
a. economies of scale
b. increasing marginal returns
c. diminishing marginal returns
d. decreasing marginal costs
e. diseconomies of scale
The difference between variable cost and fixed cost is that
Select one:
a. fixed cost is paid even when there is no output
b. fixed cost is always falling as output increases
c variable cost only increases for a while and then it decreases
d. fixed cost is always less than variable cost
e. fixed cost is not paid once production begins
Chapter 7 Solutions
Micro Economics For Today
Ch. 7.5 - Prob. 1YTECh. 7 - Prob. 1SQPCh. 7 - Prob. 2SQPCh. 7 - Prob. 3SQPCh. 7 - Prob. 4SQPCh. 7 - Prob. 5SQPCh. 7 - Prob. 6SQPCh. 7 - Prob. 7SQPCh. 7 - Prob. 8SQPCh. 7 - Prob. 9SQP
Ch. 7 - Prob. 10SQPCh. 7 - Prob. 11SQPCh. 7 - Prob. 1SQCh. 7 - Prob. 2SQCh. 7 - Prob. 3SQCh. 7 - Prob. 4SQCh. 7 - Prob. 5SQCh. 7 - Prob. 6SQCh. 7 - Prob. 7SQCh. 7 - Prob. 8SQCh. 7 - Prob. 9SQCh. 7 - Prob. 10SQCh. 7 - Prob. 11SQCh. 7 - Prob. 12SQCh. 7 - Prob. 13SQCh. 7 - Prob. 14SQCh. 7 - Prob. 15SQCh. 7 - Prob. 16SQCh. 7 - Prob. 17SQCh. 7 - Prob. 18SQCh. 7 - Prob. 19SQCh. 7 - Prob. 20SQCh. 7 - Prob. 21SQCh. 7 - Prob. 22SQCh. 7 - Prob. 23SQCh. 7 - Prob. 24SQCh. 7 - Prob. 25SQ
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Similar questions
- What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?arrow_forwardEconomies to scale refer to Select one: a. the point at which marginal cost equals average cost. b. the fact that in the long run, fixed costs remain constant as output increases. c. the range of output over which the long-run average cost falls as output increases. d. a feature of short-run production functions but not long-run production functions.arrow_forwardWhen a firm triples its inputs and finds that its output has less than tripled this is known as: a. a violation of the law of diminishing returns. b. constant returns to scale. c. diseconomies of scale. d. economies of scale.arrow_forward
- 1. Economies and Diseconomies of scale 2. Graph of marginal cost, average cost and average total cost. Take an example 3. Marginal cost, average variable cost, and average total cost. Take an examplearrow_forwardDiseconomies of scale are present when. Select one or more: a. total costs fall as output rises b. total costs rise as output rises O c. long run average costs rise as output rises d. marginal costs risearrow_forwardWhich of the following results from bureaucratic red tape, breakdown of top-to-bottom communication, and poor decisions being made when the firm gets too large and long-run average costs increase? A.Diseconomies of scale B.Decreasing returns to scale C.Increasing returns to scale D.Constant returns to scalearrow_forward
- In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits a. diseconomies of scale. b. efficient scale. c. economies of scale. d. constant returns to scale.arrow_forwardWhen output increases from 20 to 30 units the total cost increases from $500 to $600. Assuming the fixed cost is $200, which of the following is true? a. Average total cost falls b. The production cost per unit is increasing c. Average fixed costs rise d. Marginal cost is equal to fixed costarrow_forwardA company is planning to manufacture mountain bikes. Fixed monthly cost will be $100,000 and it will cost $100 to produce each bicycle. a. Write the cost function, C, of producing x mountain bikes. b. Write the average cost function, C, of producing x mountain bikes. c. How many mountain bikes must be produced each month for the company to have an average cost of $300 per bike?arrow_forward
- Read the question and given information carefully. Show all necessary steps and reasoning that lead to the answers. You nead to draw graphs. a-Define diseconomies of scale and draw the long run average cost curve of a company that demonstrates diseconomies of scale b-List 2 reasons of diseconomies of scale and (in no more than 50 words for each reason) explain how each reason can contribute to diseconomies of scalearrow_forwardWhenever a firm increases both its labor and capital by 2 percent, and as a result, output increases by more than 2 percent, then the production process is exhibiting a. increasing returns to scale. b. constant returns to scale. c. decreasing returns to scale. d. economies of scale. e. both a) and d) are correctarrow_forwardq4- Total cost increases from $500 to $600 when output increases from 20 to 30 units. Fixed costs are $200. Which of the following is true? Select one: a. The production cost per unit is increasing b. Average fixed costs rise c. Marginal cost is equal to fixed cost d. Average total cost fallsarrow_forward
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