Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 8.3, Problem 1ST
To determine
Explain the short-run period and long-run period.
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if the short run is six months, does it follow that the long run is longer than six months?
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a software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?
Chapter 8 Solutions
Microeconomics
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - Prob. 3STCh. 8.2 - Prob. 4STCh. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.4 - Prob. 1STCh. 8.4 - Prob. 2STCh. 8.4 - Prob. 3ST
Ch. 8.4 - Prob. 4STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8.5 - Prob. 3STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QPCh. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNGCh. 8 - Prob. 7WNGCh. 8 - Prob. 8WNGCh. 8 - Prob. 9WNG
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- Q4 (i) A business manager determines that t months after production begins on a new product, the number of units produced will be P thousand,where P(t) =6t2 + 5t (t + 1)2. What happens to production in the long run ? (ii) A ruptured pipe in a North Sea oil rig produces a circular oil slick that is y meters thick at a distance x meters from the rupture.Turbulence makes it difficult to directly measure the thickness of the slick at the source (where x = 0),but for x > 0,it is found that y =0.5(x2 + 3x) /x3 + x2 + 4x.Assuming the oil slick is continuously distributed,how thick would you expect it to be at the source?arrow_forwardGive business examples of short-run costs, economies of scale, and minimum efficient scale (MES).arrow_forwardThe long run is defined as A) the period of time when all resources are variable. B) any time after one year. C) the period of time when most (more than 50 percent) resources are variable. D) the period of time when all resources are fixed.arrow_forward
- 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?arrow_forwardWhat 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?arrow_forwardWhat are different types of costs involved in production of goods and services? Analyze the relationship between cost and productivity in the short run.arrow_forward
- If the short run is 18 months does it follow that the long run is longer than 18 months?arrow_forwardWhat factors account for a fall in the long-run cost curve?arrow_forwardSuppose that Jump A Lot Inc. can produce 12 trampolines a day for a total cost of $1,840. If technology and input prices remain the same and total cost increases to $3,680, what must be the new quantity of output per day under conditions of a) constant returns to scale (Click to select) b) economies of scale (Click to select) c) diseconomies of scale ✓ (Click to select) output increases to more than 24 output increases to less than 24 output increases to 24arrow_forward
- What are economies and diseconomies of scale? How do they arise? What do they imply for the shape of the long-run average cost curve?arrow_forwardThe yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost of holding is $4 per unit per year. If the widget is ordered in batches of 1000 units, what is the total ordering cost for a year? (Use the Economic order quantity assumptions)arrow_forwardSuppose a company sells a product for $50 per unit. The variable cost per unit is $20 and the company incurs fixed costs of $10,000 per month. How many units does the company need to sell in a month to break even?arrow_forward
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