In the short run, when average variable cost of production is less than the price, a price takers firm will set production to:  A zero B Where MC=MR C Where TR=TC D Where AC=MR E Where p = AC

Q: The cost structure of the typical ice cream producer is as follows. Average total cost i 50 1 ATC(Q)…

A: The cost function describes the link between production and costs. The cost function is obtained by…

Q: You own a firm with a total cost function of: TC = 40 + 150, where Q is the number of output. As you…

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

Q: In the long run, a profit maximising firm produces any given level of output by choosing the…

A: In the long run, the firm produces any output based on the long-run average total cost curve. The…

Q: A competitive firm uses two variable factors to produce its output, with a production function y =…

A: A firm in its initial days must determine the amount of output it must produce before turning…

Q: Q5: If the marginal cost (MC) of a firm is a function of output, C'( Q) = 10e0.5Q , and if the fixed…

A: If we have the marginal cost function, we can integrate to find the total cost. MC= 10e0.5Q…

Q: Consider the following statements when answering this question: I. A firm's marginal cost curve does…

A: Marginal cost is the additional cost that occurs from the production of one additional unit of the…

Q: A firm's short-run cost function is given by: C (q) = 50 + 10q – 6q² + q³ |3D What is the lowest the…

A: Cost function: The production function model is used by management to run numerous production…

Q: Suppose a wind turbine producer faces this production function: Q=0.25KL with MP = 0.25K; MPk =…

A: Given wage = 12 and rental cost = 22

Q: Relate the law of diminishing returns to a firm’s short-run production costs.

A: The short-run is the period where few factors of production are fixed and few are variable.…

Q: Randall Cars repair Factory has the total Cost Function TC (Q) = 4₁1 Q¹+ 26/Qx+30 where Q stands for…

A:

Q: A firm's short-run cost function is given by: C (q) = 50 + 10g – 6q² +q? What is the lowest the…

A: Given: Cost function: =50+10q-6q2+q3 To find: lowest price

Q: Suppose a factory's marginal cost has a minimum value of $2; its average variable cost has a minimum…

A: In the short run, there are fixed costs and variable cost and in the long run there exists only…

Q: In the short run, a à firm's.fixed cost à. Is zero. Cannot be escaped. c. Çan be escaped only by…

A: The cost of production is the costs incurred in the process of production of the firm. There are…

Q: a firm has the production function Q=min{2L,K}, find the cost function in the long run if wage is $2…

A: The provided production function is: Q=min{2L,K}

Q: Q. 1. Use production function q(L, K) = L'"ª KV and derive the followings: Short-run and long-run…

A: b. Derive cost functions by equating Marginal Rate of Technical substitution (MRTS) to the input…

Q: Q. 1. Use production function q(L, K) = L'"ª KV* and derive the followings: (a) (b) (c) (d)…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: A firm has two plants with marginal costs: MC1(y )=3y+2 and MC2(y )=8y. Assuming that the firm is a…

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Q: Explain in your own words why in the short run a firm may continue to produce even at a loss…

A: A firm in the short will continue to produce until price covers it variable cost. Otherwise the firm…

Q: (b) The marginal cost of two firms is given by the following C'(Q) - 100e 10 TC= 3000 when Q = 0 TC…

A: With the given information the following is solved in the next steps.

Q: Consider a competitive firm that has access to a technology described by the following production…

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Q: Assume a firm is a small business and act as a price-taker in the market, the market price of the…

A: Firm's price product = 20 C(q) = 0.5q2+5q+100

Q: Construct a short-run supply function for an entrepreneur whose short-run cost function is C =…

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Q: The following table provides information about long-run average cost curve of a firm: Quantity LRAC…

A: A firm is said to experience economies of scale when its average cost of producing each unit of…

Q: Suppose a firm has production function F(L, K) = L6K.6. Following the steps in the slides, derive…

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Q: cost function of a single product firm is: C(Q)=1.9+4.5Q+8.2Q^2 If all firms have the same cost…

A: In long run perfectly competitive from operates at following point; P= MC = AC. C = 1.9+ 4.5Q+ 8.2Q²…

Q: The level of output where a straight line drawn from the origin is tangent to the total cost curve…

A: # Total cost curve shows the relationship between the quantity of production and the total cost…

Q: Rick's ski board factory has the Total Cost function: TC(Q)=0.02Q³ +300Q +200 where Q is the number…

A: The total cost function is the sum of the variable and the fixed cost. The variable cost is the cost…

Q: Consider a firm in a perfectly competitive market. The firm's production function is q=5L 2K.3 The…

A: The total cost of a firm is equal to the cost of labor (variable cost) and cost of capital (fixed…

Q: Suppose a firm's marginal cost is increasing as it produces more output. Then the firms is said to…

A: The excess cost that is incurred by the producer to make an additional unit of output is known as…

Q: What of the following is considered "sunk cost" in the short run? Variable cost. (VC, or TVC)…

A: Definition: Sunk Costs: In economics and firm decision-making, a sunk cost is a cost that has…

Q: The cost function for Acme Laundry is C(q) = 50 + 30q + q°, where q is tons of laundry cleaned. What…

A: Solution: Profits are maximized at the output level where MC = MR. MC is the first order derivative…

Q: Assume that an entrepreneur’s short-run total cost function is C = q^3 − 10q^2 + 17q + 66. Calculate…

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Q: onsider a firm with the following cost function:   C (q) = 4q^2 + 100   Find the long-run supply…

A: The long-run supply is the supply of goods available when all inputs are variable. Here, we…

Q: Answer questions number 15 and 16 on the basis of the following output data for a firm. Assume that…

A: Given Number of workers Units of output 0 0 1 40 2 90 3 126 4 150 5 165 6 180

Q: Suppose the cost function for a firm is given by C(q) = 200 + 5q. Then: (i) the marginal cost is…

A: Answer: Given, Cq=200+5q (1). Marginal cost (MC): marginal cost refers to the addition to the total…

Q: An increase in the firm's cost of a fixed input will in the long-run, cause the

A: An increase in the firm's cost of a fixed input will increase the fixed cost of firm. An increase in…

Q: If a firm's marginal revenue is below its marginal cost, an increase in production will usually: a.…

A: Marginal cost (MC): - it is the additional cost incurred due to the production of additional units…

Q: Peter's Pipers producers plumbing pipe. The long-run total cost of Peter's pipes is LTC =…

A: Average cost is the per unit cost of production

Q: Suppose the total cost function of a firm that produces hotdogs is C= 150q - 4q +2q where q is the…

A:

Q: Joey operates a lemonade stand. His cost of the lemons, sugar, and water per 8 oz. glass is $0.15.…

A: The total cost of a firm is determined not just by the fixed costs but also the marginal costs of a…

Q: The Jabot company's production function is: Q(L, K) = L½K½ The target level of output is: Q = Qo The…

A: In the long run the optimal condition is given by, MRTS = (w/r) This means that the slope of the…

Q: A competitive firm uses two variable factors to produce its output, with a production function y =…

A: Y = min(x1,x2) P(x1) = w1 = $8 P(x2) = w2 = $5 Q ≤ 10 , FC = $80 Cost function = 13q + 80 Minimum…

Q: A firm has the following Cobb-Douglas production function:         q=(L^α)(K^1-α) 0<α < 1 is a…

A: Production Function: q = LαK1-α In the short run, K = 1. Therefore: q = Lα⇒L = q1α Total Cost: TC =…

Q: Suppose a firm’s short-run cost curves were found to be: Total Cost = SRTC = 1 + 2Q + Q2 Marginal…

A: Since the firm is a price taker so its perfectly competitive. The firm will maximise profit at a…

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.