Q: If a higher level of production allows workers to specialize in particular tasks, a firm will likely…
A: Economies of scale refers to the cost advantage of the producers that they earn on the output due to…
Q: In the long run, a profit maximising firm produces any given level of output by choosing the…
A: In the long run, the firm produces any output based on the long-run average total cost curve. The…
Q: Which of the following statements best represents a difference between short-run and long-run cost?…
A: In the production function, different inputs are used to produce the final output. Each input has…
Q: If a firm produce zero, its cost must be zero in the short run? C True C False
A: The total cost of production can be divided into two components namely fixed cost and variable cost…
Q: Which of the following is true of fixed costs? a. Fixed costs can be changed, but it is…
A: Fixed costs are those that do not change with changes in the output level produced. They are the…
Q: Are all fixed costs also sunk costs?
A: Sunk Cost: It refers to the cost that is once incurred can’t be recovered.Fixed Cost: It is the cost…
Q: What happens to the average fixed cost, when the output of a firm increases.
A: # In an economy, the average fixed cost is referred to be as fixed cost per unit of output produced.…
Q: The marginal cost curve: is a vertical line. generally rises at first and then declines as output…
A: Marginal cost is the cost of producing additional unit of output. The shape of marginal cost depends…
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A: Labor productivity has increased. Labor productivity and cost of production (except fixed cost) are…
Q: Write a short note on Law of diminishing returns – implications for the short-run cost curve
A: Law of diminishing return to scale implies that as the number of a variable input is raised keeping…
Q: The long run is a period of time: that is too short to change the size of a firm's plant. that is…
A: The economy evaluates its production process or policy implication in two different brackets of time…
Q: Mark's coffee shop has the production function, q=4K0.5L0.5. If the price of labor, L, is 5 and the…
A: "In economics, a firm produce quantity such that it maximizes it's profits and minimizes it's cost…
Q: When the marginal product of labor diminishes average fixed cost rises average variable cost is…
A: Marginal product of labor is the additional output produced by employing an additional unit of…
Q: Miguel and Jake run a paper company. Each week they need to produce 1,000 reams of paper to ship to…
A: Marginal rate of technical substitution is the ratio of marginal product of labor and marginal…
Q: The local ice cream shop is trying to figure out how many workers to hire, and part of the decision…
A: Answer to the question is as follows :
Q: In the theory of the firm, economist consider the total cost to be a function of the output level Q:…
A: Answer - According to the mathematical defination of the funtion is that fucntion is a relation…
Q: As a firm hires more workers, holding capital and other factors constant, the marginal physical…
A: Answer is (a) the amount of other inputs each worker has to work with declines as the number of…
Q: A firm doubles the quantity of all resources it employs and, as a result, output doubles. Which of…
A: By doubling the inputs that are employed in producing the good, will not increase the variable cost…
Q: True or False The slope of the total cost curve is equal to marginal cost, or the change in…
A: Total cost It refers to all the cost or expense that is incur in a production process.It is given by…
Q: The marginal cost curve intersects the minimum point of both the average total cost curve and the…
A: The following are the definitions of the terms asked in the above questions. The marginal cost is…
Q: Explain why an increase in the price of an input must typically cause an increase in the long-run…
A: As we know in long run , firms can increase both factors simultaneously and due to this firm…
Q: The market for drones is perfectly competitive. Labor is the only variable input. The fixed cost is…
A: Total Cost is the sum of fixed cost and variable cost. TC=FC+VC Fixed cost is that cost which is…
Q: Suppose the production function is Q = 50 (KL)1/2. (Quantity = 50 times the square root of capital…
A: Q = 50 (KL)1/2 Q = 50 K1/2L1/2 In short run, some input factors are fixed and some are…
Q: A manager hires labor and rents capital equipment in a very competitive market. Currently the wage…
A: Given wage rate (w) = $12Capital rent (r) = $8Marginal product of labor (MPL) = 60 unitsMarginal…
Q: fall in the long-run cost curve
A: A cost curve which represents the minimum cost at which output can be produced in the long run is…
Q: What should he recommend as a short-run remedy?
A: Marginal product of labour in plant B is higher than Plant A
Q: When the marginal product of adding a worker is a greater loss than the loss of the marginal product…
A: When the marginal product of adding a worker is a greater loss than the loss of the marginal product…
Q: QUESTION 18 An input that cannot vary in the short run is called, a. Fixed input b. variable input…
A: In short run the firm adjust theirs variable cost and labour as they required as a output increase…
Q: In the short run, which of the following costs will not change as output changes? marginal cost.…
A: The short run is a period of time in which at least one factor of production (input) is fixed, while…
Q: Consider a producer with the production function y = min {2L, K} and suppose the input prices are…
A: Given, The production function, Y = min(2L, K), w = 1 r = 2 a) The cost function is given by: C = wL…
Q: Is it true that in a short-run production process, the marginal cost curve eventually slopes upward…
A: No, It's not valid because the MC curve is usually upward-sloping, and there exists a decrease in…
Q: if a firm hire workers at $3 week , labour is 1 and output is 6 what is the fixed cost, variable…
A: Wages (W) is given as $3.Labor (L) is 1.Output (Q) is 6 units.
Q: Fixed costs are associated with Multiple Choice highly adjustable inputs such as labor. both…
A: Fixed costs are costs that does not change with increase or decrease in production/sales. They are…
Q: The short run is a time period that is A) long enough to change the size of the firm's plant. B) too…
A: Time period refers to the amount of time required for a factor to change. Time period influences the…
Q: Answer questions number 15 and 16 on the basis of the following output data for a firm. Assume that…
A: Given Number of workers Units of output 0 0 1 40 2 90 3 126 4 150 5 165 6 180
Q: Suppose the short run production function is q=10*
A: Given the production function, q = 10*L Wage rate = $10
Q: Assume that you have the following production function and input prices in the long run: 2 2 3 2 3 3…
A: Given: The production function and input prices are: W = 8 r = 4 Firm input bundle is (8, 10) To…
Q: The production period during which the firm can alter its use of all inputs is known as the Olong…
A: The goods utilised in the creation of other commodities and services are referred to as inputs.…
Q: Diminishing returns occurs in the short run because The average product of labor will decrease after…
A: A firm faces different market situation in the short-run as well as in the long-run.
Q: The short run is the time frame A) during which the quantities of all resources are fixed. B) during…
A: Production takes place in the short run while all planning is done in the long run.
Q: Why would labor be treated as a variable cost? labor costs will decrease as the firm produces more…
A: Fixed cost refers to the cost which remains same at all levels of output. It is independent of…
Q: Q1. In the theory of production, diminishing marginal returns to labour holds in the short run…
A: Since you asked multiple questions, we will solve the first question for you. If you want any…
Q: Joe's coffee shop has the production function, q= 4k0.5 L0.5. If the price of labor, L, is 5 and the…
A: q= 4k0.5 L0.5 PL = 5 PK = 20 q=200
Q: Explain how a change in the price of one input factor changes a firm’s long-run expansion path?
A: The firms, and businesses are the entities who are considered to be of utmost importance for the…
Q: The main difference between the short run and the long run is that firms earn zero profits in the…
A: There are two types of factor of production which are fixed and variable factor of production. The…
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- The short-run market demand and supply for Kente cloth are expressed as follows: Demand: ? = 40 − 0.25? Supply: ? = 5 + 0.05? Marginal cost: −20 +4? a) The short-run level of output is ___________ metres.[1] 40.00[2] 5.05[3] 35.30[4] 20.00[5] 7.71Assume the natural gas industry is still living with the short-run supply disruption. Then, unusually warm weather causes demand for natural gas to decrease unexpectedly. Analyze the impact of this reduction in demand in for natural gas. graphically depict any changes affecting the market for natural gas and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). assume the natural gas industry is perfectly competitive, demand is downward sloping, supply is upward sloping, and production technology results in traditional U-shaped ATC and AVC curves. market price is always greater than the minimum of the AVC curve.In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut sells for the market price of $0.75 and they sell out every day. Assume that this company has labor costs of $275 and materials costs of $400. a. At what price would this donut shop shutdown in the short run? b. Using only variable costs, what is the donut shop’s daily profit? - Now assume that the owner is thinking of adding a second location downtown. The capital investment required is $4,000. The normal rate of return is 5%. c. If the new shop could operate under the same conditions as the original location is it a good business decision to expand?
- 5. Profit maximization and shutting down in the short run Suppose that the market for wind chimes is a competitive market. The following graph shows the daily cost curves of a firm operating in this market. IMG 1 For each price in the following table, calculate the firm's optimal quantity of units to produce, and determine the profit or loss if it produces at that quantity, using the data from the graph to identify its total variable cost. Assume that if the firm is indifferent between producing and shutting down, it will produce. (Hint: You can select the purple points [diamond symbols] on the graph to see precise information on average variable cost.) *Points on the purple line are (1, 14) (4, 10.5) (6, 10) (8, 10.5) (12, 16) (15, 24) (18, 34) IMG 2 If the firm shuts down, it must incur its fixed costs (FC) in the short run. In this case, the firm's fixed cost is $44,000 per day. In other words, if it shuts down, the firm would suffer losses of $44,000 per day until…Draw a diagram for a perfectly competitive industry with firms earning normalprofits in the long run. Assume that all firms in the industry use oil as key inputs.Using an appropriate diagram, illustrate an increase in the price of inputs. Will firmlevel profits increase or decrease and will market supply increase or decrease?Using the Diagram above, answer the following questions: (c) Suppose the market price of the good in the short-run is $9 per unit. What do you know about this firm’s short-run profits, TR, TC, FC, VC, and level of production given this information? What do you predict will happen in the long-run in this market? (Hint: describe verbally, with numerical reference points, what you know about these different measures.)
- A market is in long-run equilibrium and firms inthis market have identical cost structures. Supposedemand in this market decreases. Describe whathappens to the profit-maximizing output quantityfor individual firms as the market leaves and thenreturns to long-run equilibrium.Now analyze the impact of the outbreak of respiratory illnesses on the market for antibiotics. What health care experts are calling the “tripledemic” (Covid, flu, and RSV) has dramatically increased demand for antibiotics in the United States. Assume there are no changes to the supply of these drugs. On the same graph you produced in Question 1, graphically depict any changes affecting the market for antibiotics and any changes that impact the individual firm. Show the movements of the curves (if any) and the new Short Run Equilibrium (SRE). Indicate the new market equilibrium P1 and Q1, the optimal output of an individual firm representative of the other firms in the industry at this SRE (labeled as q1), and the individual firm’s profit π1, if any (shaded and clearly labeled). Reminder: be sure to label all relevant points and axes.Consider the perfectly competitive market for steel, which is in long-run equilibrium. Now the demand for cars, for which steel is an essential input, decreases. As a result, we would expect that in the market for steel Profits will increase in the long-run Firms will enter the market in the short-run The quantity produced by the individual firm will increase in the short-run. Profits will decrease in the short-run
- Place the orange line (square symbol) on the following graph to show the most likely long-run supply curve for pistachios. (Note: Place the points of the line either on Y and V or on Y and S.) PRICE (Dollars per pound) 48 40 32 16 8 O 0 4 S V Short-Run Supply 2 6 8 10 QUANTITY (Thousands of pounds of pistachios) 12 Long-Run Supply ? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Illustrate and explain how the short-run supply curve of a price-taking firm is determined.Suppose that the seitan industry is initially operating in long-run equilibrium at a price level of $5 per pound of seitan and quantity of 125 million pounds per year. Suppose a leading foodie video blogger raises awareness for a scholarly article that links seitan consumption to premature hair loss and unhealthy skin. The viral video is expected to cause consumers to demand seitan at every price. In the short run, firms will respond by .
