c. If all prices (input and output) double, then costs will increase by more than dout d. If a firm doubles its use of all inputs while using an increasing returns to scale technology, then its profits will exactly double.
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- A firm analyzes the effects of raising its current level of output and finds that doing so will cause its average total cost to increase. If the firm pays both fixed and variable costs of production, which of the following must be true? (Check all that apply) A. The effect of average variable cost increasing dominates the effect of average fixed cost decreasing B. The marginal cost is greater than the average total cost C. The marginal cost curve is less than the average total cost D. The effect of average fixed cost decreasing dominates the effect of average variable cost increasingPlease help ASAP What is the firm's fixed cost? What is the profit-maximizing level of output? Given that half of the fixed cost is avoidable and the firm produces at the optimal level of output, what is the firm's avoidable cost? Should the firm shut down its production? yes or noEconomics Answer "False" or "True" each of the following. Justify by relying on graphical analysis whenever possible. 3.- If the marginal income is greater than the marginal cost, the competitive company will increase its profits by increasing its production (we assume increasing marginal costs). 4.- An industry in which the production process can be done with increasing economies of scale (for any level of production) cannot be one of perfect competition. answer both asap thnx
- Q.No.3. Consider the production function: (3) Y = 0.75X + 0.0042X2 – 0.000023X3 (a) At what level of X, the output will be maximum? (b) If input price is 0.15$ and output price is 4$ then at what level of X, profit will be maximum?Q1.The following is a Cobb-Douglas production function: Q = 1.75K0.6L0.5. What is correct here? * -This production function displays constant returns to scale -This production function displays increasing returns to scale -A one-percent change in L will cause Q to change by one percent -This production function displays decreasing returns to scale Q2. For studying demand relationships for a proposed new product that no one has ever used before, what would be the best method to use? * -consumer surveys, where potential customers hear about the product and are asked their opinions -double log functional form regression model -ordinary least squares regression on historical data -market experiments, where the price is set differently in two marketsConsider the following marginal cost function MC= 5 + 2qi. (a) Does the production process exhibits increasing returns? decreasing returns? constant returns? (b) If the price is $23. What’s the optimal production level? (c) If the price is $31. What’s the optimal production level?
- A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. If the price is $20 per unit, what is the break even amount of units for technology A? A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. If the price is $20 per unit, what is the break even amount of units for technology A? a. 70 b. 60 c. 50 d. None - They would have to shut downTo maximize profit, a price taker will expand its output as long as the sale of additional units adds more to revenues (marginal revenues) than to costs (marginal costs). Therefore, the profit-maximizing price taker will produce the output level at which marginal revenue (and price) equals marginal cost. In a price-taker market, if a business produces efficiently (i.e., that is, where marginal revenues = marginal costs), the firm will be able to make at least a normal profit. True of False. ExplainExplain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal cost is on the rise. People often believe that large firms in an industry have cost advantages over small firms in the same industry. For example, they might think a big oil company has a cost advantage over a small oil company. For this to be true, what condition must exist? Explain your answer.
- Explain the relationship between the determinant (the cost of factors of production and the state of technology) and quantity supplied of these two products (1. Sony Television and 2. Samsung Mobile phone)Which statement must be false? a) When a firm has increasing returns to scale in production, its marginal cost curve will be downward sloping. b) When a firm has constant returns to scale, its total cost curve will be an upward sloping line. c) When a firm has diminishing returns to scale in production, its average cost curve will be upward sloping. d) Every firm faces eventually diminishing returns to scale, where its average cost curve reaches its minimum.a. At a product price of $56.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Profit- maximizing output = 8 units per firm (iii) What economic profit or loss will the firm realize per unit of output? Profit per unit = $ 62.96 b. At a product price of $41.00 (i) Will this firm produce in the short run? Yes (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Profit-maximizing output = 6 units per firm (iii) What economic profit or loss will the firm realize per unit of output? Loss per unit = $ 39 c. At a product price of $32.00 (i) Will this firm produce in the short run? No (ii) If it is preferable to produce, what will be the profit-maximizing or loss-minimizing output? Non applicable output = 0 units per firm iii) What economic profit or loss will the firm realize per unit of output? Total…