If a firm's production exhibits economies of scale then which of the following is true? The firm is maximizing profits Its marginal cost is strictly larger than its LRATC Its marginal cost is equal to its LRATC Its marginal cost is strictlv smaller than its L RATC.

Q: of scale. As Big Jake Lumber expands, the cost of shipping the lumber drops sharply. This is an…

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Q: A firm’s production function is given by q = min{M, L1/2}, where M is the number of machines and L…

A: Given production function q=min(M,L1/2) Price of Labor, W=1 Price of Machine, Pm=2

Q: True or false? a. The AFC curve can never rise. b. Diminishing marginal product is a long-run…

A: The AFC stand for Average Fixed Cost curve which refer to that price of a commodity in the economy…

Q: Beyond a certain level of output, the short-run marginal cost witl rise because there is no fixed…

A: Law of diminishing return to scale implies that as the number of a variable input is raised keeping…

Q: 4. Select the production function with increasing returns to scale: A. q = (L+ 1)K B. q = (VI + VR)²…

A: To get which function has what type of scale we will scaled up the factors of production by 2 to…

Q: Suppose you as a business person find that the price of your product is less than minimum average…

A: The shutdown point is defined as the intersection of the average variable cost curve and the…

Q: Diseconomices of scale means As output increases, long run avearge cost (LRAC) decreases As output…

A: Economies of scale, diseconomies of scale, and the efficient scale depicts the relation between…

Q: Modified True or False: State whether each statement is true or false. If the statement is false,…

A: Optimal scale of plant is the scale of plant where costs are minimized. As the word optimal suggests…

Q: Both capital and labor are variable inputs. Suppose the wage rate of labor is 16 (per hour) and the…

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

Q: c. If all prices (input and output) double, then costs will increase by more than dout d. If a firm…

A: Return to scale, in financial matters, the quantitative change in result of a firm or industry…

Q: Short run is best characterized by a One imput and two outputs as illustrated in the class notes b.…

A: From the given information, it's impossible to say anything about the number of outputs. Also,…

Q: True or False. Please explain The production function f(x1,x2,x3) = (min{0.5x1;0.75x2 })0.5 ·x30.5…

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Q: Which of the following statements is entirely correct? OBoth economies of scale and diminishing…

A: Economics of scale refers to impact on the total output if all the input factors are changed. While…

Q: Bridget's Brewery production function is given by Y(K,L) = 100(KL)^(3/4) where K is the number of…

A: Introduction, First of all we should put the values of the following in our mind That is y(k,l)=…

Q: Which of the following production functions exhibit(s) constant returns to scale? I. Q= KL K+L II. Q…

A: Given:  There are three production functions: 1. Q=KLK+L2. Q=2K+L3. Q=K0.8L0.2

Q: Economist describe short run decisions as constrained decisions while long run decision are…

A: In the short run, few costs are fixed and few are variable but in the long run their will be no…

Q: As a firm expands its output, its average fixed cost does which of the following? O It declines…

A: Average Fixed Cost is the total fixed cost per unit of output.  AFC = TFC/Q

Q: Consider the production function Q = 20K1/2L1/2. The firm operates in the short run with 20 units of…

A: In the short run, some factor of production is fixed and some factor of production can vary.…

Q: What is miimum effcient scae Mirimum efcient scale is OA e level of output at which a fim begins to…

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

Q: Is it true the statement that if average production cost is increasing, a firm’s technology exhibits…

A: In a two factor production function, the scale of production refers to the quantity of labour and…

Q: In recent years, the United States has experienced large increases in oil production due in large…

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

Q: A production process using two inputs, labor and capital, can be written as: Q= 3LK where Q…

A: The production function of the firm shows the maximum amount of output the firm is able to produce…

Q: True or false The Law of Diminishing returns implies that the marginal cost of production (MC) is…

A: Answer:  Law of diminishing returns: According to the Law of diminishing returns if an input of…

Q: Q1. Over a reasonable range of quantities, firms producing goods A and B have th following cost…

A: Cost function : C = 100 + 4qa + 8qb - 2qaqb  Economies of scale refers to the gradual decline…

Q: When the firm's LRATC curve is downward sloping over its range of production, this implies that A.…

A: Long run average total cost curve shows the lowest cost for producing each quantity of output in the…

Q: Given that TC=2000+100Q-10Q2+Q3 where Q is level of output and maximum level of MP is 15 units,…

A: TC=2000+100Q-10Q2+Q3 The maximum level of MP = 15 units

Q: 13. If a firm's production function is given by Q = K0.3L03 then it exhibits a. Decreasing returns…

A: Q = K0.3L0.3 where we take α = 0.3β = 0.3

Q: Q2. A firm's production function is Q = 9LZ+1)/10K(Y+1)/10 • Find out MPL and MPK. • Find out APL…

A: The additional output that emerges from adding one unit of capital—typically cash—is known as the…

Q: If output is below full emplc True O False

A: when output exceeds full employment then, in that case, the actual rate of unemployment is less than…

Q: What is the difference between economies of scale andeconomies of scope? How do firms consider these…

A: The concepts of economies of scope and economies of scale explains the situations when the big firms…

Q: Intelligent Inc. specializes in the manufacture ofcomponents for personal computers. Managementhas…

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Q: For an increase in output, average costs change by more in the short-run than in the long-run, but…

A: Average cost: The average cost for a firm can be defined as the cost incurred per unit of output for…

Q: A firm with positive fixed costs encounters CRS and then DRS as it expands production. Show the…

A: Constant return to scale where MP is a horizontal line and In Diminishing returns to scale MP is…

Q: to Scale and Economies of Scale uahon in whien output doubles when all inputs ae lovlored. > Can a…

A: Return to scale show the long-run production function where it can be increasing, decreasing, and…

Q: A Chinese high technology manufacturing firm has a production function of (based on Zhang. et al.…

A: Given information: Production function: q = 13L0.20K0.80w= $2r = $8

Q: A firm's production is given by f (L, K) = min(3L, 2K), and it faces input prices w = $30/hr and r =

A: Given; Production function; f(L,K)=16min(3L,2K) Price of labor; w=$30 per hours Price of capital; r=…

Q: The cost, in dollars, of producing z units of a certain item is given by C (z) = 5z – 8V 3. %3D Find…

A: Cost function  C(x) = 5x-8x-3       .......... (1) We have to find a production level that minimizes…

Q: Diseconomices of scale means As output increases, long run avearge cost (LRAC) increases O if we…

A: When there is a decrease in average cost during a long run with an increase in production scale is…

Q: The production function for a product in given by q-10OK a merginal product functiore MP100K and…

A: Firm will minimise cost at a point where marginal rate of Transformation is equal to the price ratio…

Q: Economies of Scale. Figure 7.10b illustrates the situation in which a larger plant can attain a…

A: The economics as a study is associated with the use of resources, where the resources are limited in…

Q: Diseconomies of scale are: [11.4.4 Diseconomies of Scale: An Upward-Sloping LRATC Curve] A instances…

A: There are two type of scale in economies - 1) economies of scale  2) diseconomies of scale  In short…

Q: In the long run, if 1,000 units are produced at a cost of $8,000 and 1,200 units at a cost of…

A: Given that, 1,000 units are produced at a cost of $8,000 and  1,200 units are produced at a cost of…

Q: A firm experiemces A) diseconomies of scale, average total cost curve slopes downward B) economies…

A: C)diminishing marginal Returns; average total cost curve shift upward

Q: A firm is producing 20 units with an averagetotal cost of $25 and a marginal cost of $15. Ifit…

A: Costs are the expenses that firms incur in the production of goods and services.

Q: Is it true that if a firm’s technology exhibits the decreasing return to scale, then average…

A: Introduction The scale of production in two factor production function means a given amount of labor…

Q: Q2. A firm's production function is Q = 9LZ+1)/10KY+1)/10 • Find out MPL and MPK. • Find out APL…

A: MPL = Marginal product of labor MPK = Marginal product of capital APL = Average product of labor

Q: Returns to scale in production: Do the following production functions exhibitincreasing, constant,…

A: Note: Since you have asked multiple parts, we will solve the first 3 parts for you. If you want any…

Q: tion is TC = 200Q - 4Q² + 0.050, at what levels of output (Q) does the firm face diseconomies of…

A: TC = 200Q - 4Q2 + 0.05Q3   Average cost = TCQ = 200 - 4Q + 0.05 Q2   dACdQ =-4 + 0.1Q d2(TC)dQ2= 0.1…

Q: As output increases, marginal costs willeventually incrense a average total cost increases O…

A: As there is an increase in the level of output, there comes a rise in the level of marginal cost…