Explain with the help of Graphs of Total Product (TP) and Marginal product (MP) the three laws of variable proportions and their significance in Industry and agriculture.
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Explain with the help of Graphs of Total Product (TP) and Marginal product (MP) the three laws of variable proportions and their significance in Industry and agriculture. Give the relationship between TP and MP at different stages of variable proportions. What is the relationship between Average Product curve (AP) and marginal product curve (MP) and explain at what point a progressive firm should change its labor or capital inputs with more skilled labor or with new technological machine in order to remain comparative in the market. What would happen to its product in the market if it does not change its machines or if it changes all its machines at the same time
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- Relating to these two objectives, please answer the following: Examine the principles and theories underlying the concepts of production and cost as well as the relationship between these two concepts. Analyze these principles of production and cost in order to derive the optimum behavior of producers and sellers Question 1 You are a manager of an advertising company. The company is running short of funds, so you decide to increase revenue. Should you increase or decrease the price of running ads? Explain. Question 2 You own a printing firm. Two of your senior managers provide you with advice. The first manager states that your company is losing money for every unit that is printed. To minimize losses, she advises that you reduce your production levels. The second manager states that if your firm sells some more units, the price will cover your increase in costs. In order to reduce losses, the second manager recommends that you should increase production. Explain which manager is…A firm’s product sells for $4 per unit in a highly competitive market. The firm produces output using capital (which it rents at $25 per hour) and labor (which is paid a wage of $30 per hour under a contract for 20 hours of labor services). Complete the table and use that information to answer these questions. a. Identify the fixed and variable inputs. b. What are the firm’s fixed costs? c. What is the variable cost of producing 475 units of output? d. How many units of the variable input should be used to maximize profits? e. What are the maximum profits this firm can earn? f. Over what range of the variable input usage do increasing marginal returns exist? g. Over what range of the variable input usage do decreasing marginal returns exist? h. Over what range of input usage do negative marginal returns exist?* The marginal product of a factor shows how much an additional unit of a factor adds to unit costs: - the level of production. - profitability. - dollar revenue. * The marginal revenue product of a factor shows how much an additional unit of a factor adds to the level of production: - dollar revenue. - profitability. - unit costs. * A profit‑maximizing firm operating in a perfectly competitive market will add new units of a factor of production until: - marginal revenue product equals factor price. - marginal product equals factor price. - marginal revenue product equals marginal product. - marginal revenue product equals marginal revenue.
- Which of the following statements is false? a. The long-run average-total-cost curve does not connect the minimum points of each of the short-run average-total-cost curves. b. The long-run average-total-cost curve shows the minimum cost of producing each level of output when all resources are variable. c. The short-run average-total-cost curve shows the minimum costs of producing each level of output when at least one input is fixed. d. If short-run average-total-costs are declining, then economies of scale exist. e. None of the above.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 markets“Cost functions can be very important for determining the structure of a market” Cost functions are fundamental tools in economics, revealing the relationship between a firm's total cost (TC) and important factors like fixed and variable production costs, output levels, and technological advancements. By analysing these cost functions, expressed mathematically as the relationship between TC and the quantity of output (Q), we gain valuable insights into how firms within a particular market structure make production and pricing decisions. This understanding is crucial for comprehending the dynamics and competitive landscape of different market structures. Make this more relevant to prompt and what you will be talking about Perfect competition is a market structure characterized by an infinite number of suppliers and consumers. In this ideal scenario, Everyone has all the information they need (perfect information), and the products themselves are identical (homogeneous) and there are no…
- Explain how the stages of production are determined. Give information about the shape and slope of total product curve at each stage of production . Give information about the shape and slope of the marginal product curve and average product cure at each stage of production. Indicate what happens to the marginal returns at each stage of production.In a furniture market, if a furniture company is analyzing the short run total costs, one of the following business practices would be beneficial. Which one? divide the variable costs of production by the quantity of output divide the total costs of production by the quantity of output divide total costs into two categories: fixed costs that can't be changed in the short run and variable costs that can be. divide total costs into two categories: variable costs that can't be changed in the short run and fixed costs that can beWhich of the following statements is true? (a) If a firm is experiencing decreasing returns, it will face increasing opportunity costs and hence will have a convex production possibility frontier. (b) If a firm has a steep average total cost curve, then it will have fairly low fixed costs as a proportion of total costs and would incur only a low cost penalty if output declines. (c) A firm with a concave production function at all levels of output would face a convex total cost function at all levels of output. (d) If a firm faces diminishing returns, then at low levels of output, the average variable cost effect would dominate, but at higher levels of output, the average fixed cost effect would dominate.