Explain why marginal costs increase above some level of production in the short run.

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: Suppose you own a television factory and at your current level of output, you have average total…

A: Meaning of Average Total Cost (ATC): The term average total cost refers to the addition of the…

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: At what level of production does the marginal cost have the least value? What is the marginal cost…

A: The marginal cost curve is the U-shaped curve.

Q: An individual is both the owner and the manager of a shop taken on rent. Identify implicit cost and…

A: Explicit cost:- Standard business costs that appear in the accounting records and have a direct…

Q: The marginal cost of producing the third unit of output is

A: Answer to the question is as follows :

Q: Consider the table below that describes the costs associated with producing a good (Q). Total…

A: Marginal cost refers to the additional cost of producing one more unit of output.

Q: suppose Jack produces chocolate with two inputs : factory and labor.  If the workers become more…

A: Labor productivity has increased. Labor productivity and cost of production (except fixed cost) are…

Q: Introduction to Calculus in Economics (continued): In the previous Problem Set question, we started…

A: Differentiation is the process of finding derivatives. It basically gives the rate of change in one…

Q: Three managers of APISYONADO Company are discussing a possible increase in production who do you…

A: MR.NADO is correct as according to him  the extra revenues from selling the additional perfume…

Q: Why does as output increases, average variable cost initially declines and eventually begins to…

A: In an economy, the cost is analyzed in different ways, such as total cost, marginal cost, average…

Q: It is clear that businesses operate in the short run, but do they ever operate in the long run?…

A: When a business is established the main focus of the owner is to conquer the short-run functions and…

Q: Which of the following is a cause of diminishing marginal productivity? a.In the long run, labor…

A: Marginal Productivity  Marginal productivity or marginal product is the additional output, return,…

Q: What explains the shape of the average and marginal cost curves?  Is it linked to any production…

A: Marginal cost is the measurement of change in total cost with the increment of quantity produced by…

Q: you increase the production to infinitely higher level , the average variable cost and average total…

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…

Q: Is it possible to avoid Diminishing Marginal Return? Why? Explain

A: Law of diminishing returns postulates that as more units of a variable input are used with a fixed…

Q: If the figure represented production at a cookie factory, the factory would be experiencing a)…

A: The law of diminishing returns refers to the situation where adding more of a variable to the same…

Q: Productive efficiency means output (production) is produced in the long run at

A: A perfectly competitive market is the type of market structure in which several buyers and sellers…

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: What are the different type of costs incurred in the short run and in the long run?

A: In the short run there are two types of costs, fixed and variable costs. Since there are fixed and…

Q: Consider the table below that describes the costs associated with producing a good (Q). Q Total…

A: Marginal cost of Q is equals to TC (Q) - TC(Q-1) So, MC(Q=2) = TC(Q=2) - TC(Q=1)

Q: Why Law of Diminishing Returns is a short run law?

A: Law of Diminishing returns states that as more of the variable factor is combined with the fixed…

Q: Why is the short run marginal cost curve U- Shaped?

A:

Q: C(x) = 0.01x-0.3x + 10x gives the cost, in thousands of dollars, to produce x thousand items. (a)…

A: We are going to find the Marginal Cost and Minimum marginal Cost and output required to answer this…

Q: TRUE or FALSE and explain your answer fully If the cost of production is minimized, then all inputs…

A: The marginal productivity (MP) is the additional increase in the total productivity when one more…

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: We know there is a link between productivity and costs. For example, recall the link between the…

A: In an economist's terms, when we talk about productivity, then we are talking about the marginal…

Q: If a paper mill shuts down its operations for three months so that it produces nothing, its will be…

A: Variable cost Variable expenses are volume-related and alter as production levels change. Raw…

Q: With the aid of a diagram, explain the relationship between ‘marginal cost’ and ‘average total cost’…

A: The expenditure incurred on the factors of production for the production of the final good is known…

Q: Why might marginal product be increasing at lower levels of output and decreasing at higher levels…

A: Marginal product (MP) is the extra output produced by one additional unit of input or raw material…

Q: Which stage of short run production is efficient? Why?

A: In microeconomics, we have two time periods namely short run and long run. Short run is the time…

Q: What is the difference between short-run and long-run in production theory?  *Explain thoroughly*

A: Production is defined as the process in which factors of production or inputs are put to use in…

Q: Explain the relationship between the production function and the average costs and marginal costs…

A: Answer: Production function/Total product: production function shows the relationship between output…

Q: explain why the lower marginal cost firm can never produce the same as the high marginal cost firm

A: marginal cost is the cost of producing additional unit of product . and it helps to the firm to…

Q: In the short run, if a firm chooses to operate and produce output, it must be the case that

A: The shutdown point of a firm comes when the price of the goods sold is less than the variable cost…

Q: What are different types of costs involved in production of goods and services? Analyze the…

A: Fixed expenses, variable costs, and the total cost of production make up the cost of production. The…

Q: The correct answer to whether it should be produced is that the firm should produce in the short…

A: The decision of whether a good should be produced further depends on price and average variable…

Q: What is the difference between production in the short run and production in the long run? Explain…

A:

Q: Which of the following statements correctly explains the average cost and the marginal cost of…

A: Marginal cost refers to additional cost that incurs from producing one more unit of output.

Q: Explain the idea behind diminishing marginal returns and give a real-life example.

A: Diminishing Marginal Returns happen while expanding one unit of creation, while holding different…