Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 9, Problem 2.6P
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Whether to agree or disagree with the given statements.
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Explain how a firm can have constant returns to scale in production and economies of scale in cost.
am. 82.
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Principles of Economics (12th Edition)
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- I'm not sure about part b-e for this question. How do I know if there are economies of scale in production based on a table like this?arrow_forwardQ2) Distinguish between economies of scale and economies of scope. Why can one be present without the other?arrow_forwardEbba Kantzen says the following: "I am currently producing 10,000 pizzas per month at a total cost of $50,000. If I produce 10,001 pizzas, my total cost will rise to $50,011. Therefore, my marginal cost of producing pizzas must be increasing." ( 1.) Using the point drawing tool, indicate the point of marginal cost. Label this point "Marginal cost." 2.) Using the point drawing tool, indicate the point of average total cost. Label this point "Average total cost." Carefully follow the instructions above, and only draw the required objects. Costs(dollars per pizza) (5.95,0) MC Quantity (pizzas per month) points ATCarrow_forward
- Nonearrow_forwardI'm not sure if I am doing this correctly.arrow_forward22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average (Total) Cost and quantity produced when at least one input is fixed b) It depicts the relationship between Average (Total) Cost and the scale of operation in the long run c) Both a) and b) are true d) Neither a) nor b) is true 24. Assume that you start your own business producing clay pots and hire workers to start production. The first worker produces 20 clay pots a day, and when your hire the second worker, total production increases to 48 clay pots a day. What is the marginal product of labour for the second worker? a) 20 b) 28 c) 68 d) 34arrow_forward
- The cost information in the following table shows that as production increases Quantity produced/day Total cost Variable cost 0 $50 0 1 $75 $50 2 $110 $75 3 $155 $100 4 $210 $150 5 $270 $175 6 $345 $250 A.) variable cost increases at a uniform rate. b.) variable cost increases and then eventually falls c.) average total cost always falls d.) marginal cost eventually increasesarrow_forward(1) Use the graph to answer the question. Between points C and D, the long-run average total cost curve is characterized by ________ because the firm is experiencing ________ returns to scale. A-constant returns; constant. B-economies of scale; increasing. C-economies of scale; constant D-diseconomies of scale; increasing. E-diseconomies of scale; decreasing The graph is attached on the following (2) If a firm is operating at a point on its long-run average total cost curve where the slope is negative, it is A-experiencing increasing returns to scale. B-experiencing constant returns to scale C-experiencing decreasing returns to scale. D-achieving efficient scale. E-making progressively less as it increases its inputs (3) If a firm is maximizing its profit and is earning positive economic profit, which of the following must be true? A-Average total cost < price; marginal cost = marginal revenue B-Average total cost > price; marginal cost = marginal revenue C-Average…arrow_forwardCosts in the short run versus in the long run help mearrow_forward
- Costs # Refer to the graph above to answer this question. Which curve illustrates average variable cost? OA) 1. ty B) 2. C) 3. OD) 4. Quantity of outputarrow_forwardThe table below presents production data for a particular firm. 1) Use formulas/calculation in excel to complete the table. Production batch Total output (units produced) Total fixed costs Total variable cost Total cost of production marginal cost of production Average fixed cost Average variable cost Average cost 1 100 300 800 2 200 700 3 300 1000 4 400 1200 5 500 1400 6 600 1650 7 700 2000 8 800 2500 9 900 3200 10 1000 4100 11 1100 5200 12 1200 6500arrow_forwardJust 2.1arrow_forward
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