Hi, I am studying chapter 11 from Microeconomics 21st edition. I am still confused about a certain concept. Why does MC cut ATC at its minimum point?Thank you

Q: Let F be the fixed cost of production, let VC be the variable cost of production, C be the total…

A: Fixed cost (F) is same for all output. That is, F is equal to $200.

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: Why the average fixed cost curve does not touch the output axis ? YA AFC Output Cost

A:

Q: QUESTION 25 The Marginal Cost curve crosses the Average Total Cost curve at its maximum. True False

A: "Marginal cost represents change in total costs when one more unit is produced while average total…

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: Define the term Variable-cost behavior?

A: Variable cost is the cost that varies according to the level of output.

Q: Question 5 Show that if a production function exhibit constant returns to scale, then the cost…

A: Constant returns to scale means when inputs increases by some percentage then output increases by…

Q: Using the definition QxAC = TC where Q = output, TC = the total cost of production and AC = the…

A: The average cost of production is calculated by dividing the total cost (TC) by the total output…

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: Use Exhibit 2. For Comfy Chair Factory, which of the following statements is (are) correct? (x) The…

A: Total cost is the summation of Fixed cost and variable cost . Where varible cost when there is no…

Q: What explains why the long run average cost curve is u-shaped

A: First of all average cost fall in the beginning because the factor of production or the capital used…

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: 35) What is the firm’s efficient scale?  A. the quantity of output that minimizes average total…

A: (35)  A firm's efficient scale implies the production of output such that it minimizes the average…

Q: Define the term Fixed-cost behavior?

A: A company mainly faces two type of costs known as fixed cost and variable cost. These two costs are…

Q: Which of the following is a correct statement about the relationship between average cost (AC) and…

A: The relationship between MC and AC can be stated as under: (i) When AC falls with increase in…

Q: Average cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then…

A: Marginal cost is nothing but the additional cost required to produce one extra unit while average…

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: What is the difference between implicit and explicit costs? Why do economists include both implicit…

A: Each firm in any industry is driven by profit motive. The goal of a firm is to maximize its sales…

Q: For the following cost function TC = a + bQ – cQ2 + dQ3, determine the equations for TFC, TVC, AFC,…

A: Cost of production is the monetary value occured in the process of production which includes fixed…

Q: . If economic profit equals accounting profit, what do implicitcosts equal?

A: Basics:- Economic Profit     = Revenue - Explicit Cost - Implicit Cost Accounting Profit  = Revenue…

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: On the following graph, plot Douglas Fur's average total cost (ATC) curve using the green points…

A: The overall cost paid by a firm to create a given amount of a product or provide a service is…

Q: Give two examples of variable costs

A: Variable costs are those costs which vary with the production level and thus gets changed as the…

Q: What are two examples of variable costs?

A: Variable costs depends on the level of output being produced by the firm.

Q: Marginal cost curve always cuts the lowest point of the average total cost curve. Do you agree?…

A: Marginal Cost:Marginal cost refers to the additional cost of producing the additional unit of…

Q: Explain why marginal cost curve (MC) cuts average cost curve(ATC) and average variable cost (AVC) at…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: Question 4 Copy the table below into your answer booklet and fill in the missing figures: Output…

A: Meaning of Cost: The term cost refers to the situation under which a firm occurs various expenses…

Q: What is the difference between economic profit and accounting profit? What is a normal rate of…

A: As per honor code, we’ll answer only one question at a time , we have answered the first question…

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

A:

Q: Why should sunk costs be ignored for decision making? Give an example of why it makes sense to…

A: Sunk cost are those cost which have been caused and the sum spent can not be recovered.since the…

Q: A firm produces identical outputs at two different plants. If the marginal cost at the first plant…

A: The firm seeks to maximize the profit. The profit is maximized where the MR=MC. Firm can use its…

Q: When thinking about cost analysis in Microeconomics, what are the real-world problems that occur…

A: Economies of scale are cost savings that can arise when a business expands the production scale and…

Q: if economic profit equals accounting profit, what do implicit cost equal?

A: (Q) If economic profit equals accounting profit, what do implicit cost equal? There are two types of…

Q: What is the difference between decreasing returns to scale and diminishing marginal product?

A: Meaning of Law of Variable Proportions: The term law of variable proportions refers to the…

Q: Explain why the average variable cost curve and the average total cost curve get closer to each…

A: In the short run the inputs are both fixed and variable, so all the costs incurred are also fixed…

Q: Explain why optimal marks- up vary

A: There are three facts about markup: 1).Markup is greater than or equal to zero—that is, the firm…

Q: What is direct cost? What is indirect cost? Provide detailed definitions and  example for both

A: The total cost of a product is generally categorized into direct and indirect costs.

Q: Explain the difference between fixed cost and the variable cost in economics.

A: In economics, cost refers to all the expense that has been incurred in order to produce goods and…

Q: Let F be the fixed cost of production, let VC be the variable cost of production, C be the total…

A: From the data given in the question,  Fixed cost remains same whether firms produces goods or not.…

Q: Average cost curves (except for average fixed cost) tend to be U-shaped, decreasing and then…

A: Average cost is the per unit cost of production. it is the ratio of total cost and output.  Marginal…