Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 9.8, Problem 3QQ
To determine
shape of the average total cost .
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Students have asked these similar questions
If there are diseconomies of scale within a given range of output, which of following is(are) TRUE?
A.Long-run average cost must equal short-run average cost.
B.The long-run average cost curve must be upward sloping within that range of output.
C.The short-run average cost curve must be upward sloping within that range of output.
D. All of the above.
Define economics of scale and explain they might arise. Define diseconomies of scale and explain why they might arise.
(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…
Chapter 9 Solutions
Microeconomics
Ch. 9.2 - Prob. 1QQCh. 9.2 - Prob. 2QQCh. 9.2 - Prob. 3QQCh. 9.2 - Prob. 4QQCh. 9.5 - Prob. 1QQCh. 9.5 - Prob. 2QQCh. 9.5 - Prob. 3QQCh. 9.5 - Prob. 4QQCh. 9.8 - Prob. 1QQCh. 9.8 - Prob. 2QQ
Ch. 9.8 - Prob. 3QQCh. 9.8 - Prob. 4QQCh. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 1RQCh. 9 - Which of the following are short-run and which are...Ch. 9 - Prob. 3RQCh. 9 - Indicate how each of the following would shift the...Ch. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4P
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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_forwardWhat is a long-run average cost curve?arrow_forwardIn 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_forward
- Economies 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_forwardCost curves. a) Why does the difference between AVC and ATC get smaller as Q increases? b) Why does MC intersect AVC and ATC at their minimum points? c) Explain the difference between the short run and the long run. d) What is meant by “economies of scale”? (Hint: it has to do with long run average cost) e) Give an example of economies of scale and explain.arrow_forwardProduction Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G 1 7 H 2 8 X The profuction function is given as: Q=αK + βL B andf E lie on the same isoquant, while D and G are on a higher isoquant. 3. a. This production exhibits what kind of returns to scale? Explain how you arrived at this conclusion. b. Will any combination of α and β lead to this production exhibiting increasing returns to scale? c. True or false. In general, production can display diminishing returns in all variables but still display increasing returns to scale. Explain.arrow_forward
- ATC B. Output 15. In the above long-run average total cost curve the: A) movement from A to B reflects diseconomies of scale. B) movement from B to C reflects diseconomies of scale. C) realization of economies of scale would shift the entire curve downward. D) diminishing returns. movement from B to C reflects the law of Average costarrow_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_forwardJust 2.1arrow_forward
- Give typing answer with explanation and conclusionarrow_forwardHow does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model in the photo to answerarrow_forward4. Questions and Pr Diseconomies of scale ( The law of diminishing marginal returns erence between the law of diminishing marginal returns and diseconomies of scale. applies to the short run, when at least one input is fixed, whereas when all inputs are variable and is therefore a long-run concept. Grade It Now Save & Continu Continue without saarrow_forward
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