How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect the long-run average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?

Q: Which of the following is true in the short run at the output level where average total cost is at…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: How and why does a firm’s average-total cost curve differ in the short run compared with the long…

A: In the long run, a firm adjusts the different factors of production that are fixed in comparison in…

Q: Why will firms in most markets be located at or close to the bottom of the long-run average cost…

A: In the long run, all the costs are the variable costs. In long run, costs are lower than that of in…

Q: If a firm has economies of scale, it must have increasing returns to scale. True or false? PLEASE…

A: Economies of scale means reducing production cost by increasing output at a large scale.

Q: How is the short-run average cost curve and the long-run average cost curve-shaped? What is the…

A: Short run average cost has fixed factors of production,whereas in long run average cost there are no…

Q: Which of the following is true in the short run at the output level where average total cost is at…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: The long run average cost curve is U shaped because up to a certain point you have excess K/L and…

A: Total cost refers to the total amount of expenditure incurred by the firm ti produce the given…

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: Explain the relation between average variable cost and marginal cost for both the short-run and…

A: Cost Curves show the relation between the costs that a firm incur in the process of production and…

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: What is the difference between sunk cost and fixed cost? Explain with examples.

A: Sunk costs and fixed costs are two kinds of expenses borne by a corporation in the different…

Q: Think about several different types of industries or markets and the amount of time it might take to…

A: The measure that depicts the size of business operations that are being measured by the maximum…

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: Consider the following types of firms. For each one, the long-run average cost curve eventually…

A: The expenses that are being incurred for carrying out transactions of the business are known as…

Q: Why can the distinction between fixed costs and variable costs be made in the short run?

A: Understanding the difference between fixed costs and variable costs is important for settling on…

Q: Assume that for a quantity produced of 20, the total cost is 500 and the average fixed cost is 10.…

A: We will answer the first question since the exact one was not specified. Please submit a new…

Q: the short run, a firm's average variable cost will increase as its output increases because

A: The variable cost refers to the cost which changes with change in the level of output.  AVC = TVC/Q.

Q: Why will firms in most markets be located at or close to the bottom of the longrun average cost…

A: Assuming, along these lines, a firm needs to build production in the short-run, it can do as such…

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

A: The short-run is a notion that states that at least one input is fixed while the others are variable…

Q: Distinguish between the fixed costs and the variable costs?

A: Cost represents the value of goods and services which are charged by the producers and the amount…

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: Suppose that the Law of Diminishing Returns sets in immediately (that is, there is no range of…

A:

Q: Indicate how each of the following would shift the (1) marginal- cost curve, (2)…

A: Marginal cost: It represents an extra cost of producing an extra unit of output. In the beginning,…

Q: Austin's total fixed cost (TFC) is $350/month at his cupcake bakery.  Austin employs 10 workers and…

A: The amount of output produced determines the fluctuation in variable costs. Labor costs are one type…

Q: If a firm has economies of scale, it must have increasing returns to scale. True or false? Explain.

A: The return to scale states the change in the output with the proportionate increase of all the…

Q: Suppose that you and your roommate have started a Doughnut delivery service on campus. List some of…

A: Total Fixed Cost (TFC) : It refers to that part of the total cost that does not depend on output. In…

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: Month (m): 4 Day (d): 1 Use the two numbers…

A: Fixed cost is that cost which are not depend on the quantity. It's remains same at any output level.…

Q: Compute the long-run costs in the following table. The price per unit of capital is $50 and per unit…

A: Given: Price per unit of capital=$50 Price per unit of labor=$30 The durable goods that are being…

Q: Show the effect of diminishing returns on the marginal and average cost curves of a firm in the…

A: diminishing returns is a  financial regulation expressing assuming one contribution to the…

Q: Explain why the red curve is an incorrect representation of a long-run average cost curve. Note: the…

A: The average cost is the called the per unit cost of production. The AC = TC/Q. The long run Average…

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

A: please find the answer below.

Q: . If a firm has economies of scale, it must have increasing returns to scale. True or false? EXPLAIN…

A: Economies of scale provides cost advantage to the firm.Firm is able to lower average cost through…

Q: Explain the following statement by using a graphical analysis: “The long-run average cost curve is…

A: Average cost is the cost of producing one unit of goods and services . It is calculated by dividing…

Q: What is the relationship between marginal product and marginal cost? Why do you suppose that is? Is…

A: Marginal Product: The term marginal product refers to the increase in total product due to the use…

Q: Explain how a firm is able to deal with both fixed and variable costs at the same time

A: Fixed cost is the cost of production which does not change or constant whatever the amount of good…

Q: Consider the following types of firms. For each one, the long-run average cost curve eventually…

A: Diseconomies of scale occur when a corporation or business expands to the point where its costs per…

Q: Differentiate between Fixed and Variable Costs?

A: Difference between fixed and variable costs Fixed Costs  Variable Costs 1. They are incurred on…

Q: Refer to the table below. How will the marginal cost curve look like if you draw it? Units of…

A: MC = change in TC / change in units With MC remains constant with increase in output, MC curve is…

Q: The average variable cost curve and the average total cost curve get closer to each other as output…

A: The average variable cost refers to the variable cost per unit. The average total cost is the…

Q: How and why does a firm’s average-total-cost curve differ in the short run and in the long run

A: Short-run period is that period of time in which a firm can change its level of output by only…

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…

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.