(a) Will the envelope curve be tangential to the bottom of each of the short-run average cost curves? Explain why it should or should not be.(b) What does the isoquant map look like if there arei)continuously increasing returns to scale;ii)continuously decreasing returns to scale? Please illustrate 3.(a) Will the envelope curve be tangential to the bottom of each of the short-run average costcurves? Explain why it should or should not be.(b) What does the isoquant map look like if there are(i)continuously increasing returns to scale;continuously decreasing returns to scale? Please illustrate.(ii)

3. (a)Long run average cost (LAC) is called envelop curve because it envelops all short run average…

(a) Will the envelope curve be tangential to the bottom of each of the short-run average cost curves? Explain why it should or should not be. (b) What does the isoquant map look like if there are i)continuously increasing returns to scale; ii)continuously decreasing returns to scale? Please illustrate

(a) Will the envelope curve be tangential to the bottom of each of the short-run average cost curves? Explain why it should or should not be. (b) What does the isoquant map look like if there are i)continuously increasing returns to scale; ii)continuously decreasing returns to scale? Please illustrate

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 28RQ: What shape of a long-run average cost curve illustrates economies of scale, constant returns to...

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