Is it true that in a short-run production process, the marginal cost curve eventually slopes upward because firms have to pay workers a higher wage rate as they produce more output? Explain your answer.

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: Refer to the Long Run Average Total Cost curve below to answer the following questions:

A: Economies of scale occurs when LRAC decreases as output increases. In the given curve, LRAC…

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 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 person starts their own business, one implicit cost is the loss of a steady salary from leaving…

A: This statement is True Implicit cost is the opportunity cost of the foregone alternative which is…

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: Please define the long cost curve and the short run cost curve in your own words but not more than…

A:

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: 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: The local ice cream shop is trying to figure out how many workers to hire, and part of the decision…

A: Answer to the question is as follows :

Q: Suppose that the cost of all inputs (both labor and capitol) decreases. What will happen to the…

A: In economics, inputs are considered as factors of production. That means, inputs are those factors…

Q: Question 33 Consider a firm with production function f(L,K)=3L+8K. Assume that capital is fixed at…

A: Given,Production function f(L,K)=3L+8KWhere, K is the units of capital and L is the units of…

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: Answer all the following seven parts. (a) Show the conditions for a Cobb-Douglas production function…

A: The term "long-run" refers to a period during which the production function is determined solely by…

Q: Explain why an increase in the price of an input must typically cause an increase in the long-run…

A: As we know in long run , firms can increase both factors simultaneously and due to this firm…

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: In the given figure, short-run cost curves are depicted. What role does the graph's Curve Y…

A: "Cost curves in economics represents a graph of the costs involved in the production process as a…

Q: (а) Show the conditions for a Cobb-Douglas production function under (i) increasing returns to scale…

A: The study of production is completely different according to the time frame which is very important…

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: What are the advantages of internal economies of scale ? Explain shortly.

A: Internal economies of scale mean the company improves output when the average cost of the product…

Q: 600                 2100                 2500                 2600…

A: Capital is a fixed factor. A fixed amount is assumed to be invested, the interest on which is 10%…

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: “Short-Run Production Theory is the mirror opposite of Short-Run Cost Theory,” Is this statement…

A: Answer -

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: Use the table below to answer the following question. Units Total Fixed Cost Total Variable of…

A: In the short run, a firm will have two types of cost: fixed cost and variable cost. Total fixed cost…

Q: firm has a Cobb-Douglas production function q = f(K, L) = KαL 1−α and faces wages, w, and rental…

A: Answer- "Thank you for submitting the question.But, we are authorized to solve only 3 subparts .For,…

Q: What is the difference between short-run and long-run in production theory?  *Explain thoroughly*

A: Production is defined as the process in which factors of production or inputs are put to use in…

Q: Calculate a cost function from a production function and explain how economic costs differ from…

A: The economic cost is the money value of all resources in the business. It also implies the…

Q: Distinguish between short-run and long-run production decisions and illustrate their impact on costs…

A: Average cost is total cost divided by total production while marginal cost is the change in total…

Q: What are the advantages of internal economies of scale? Explain them briefly

A: Economies of scale occur when there is a decline in the average cost of production as more and more…

Q: What would happen to output if one input would increase and the other would not?

A: Answer: Introduction: Production involves many inputs such as land labor, and capital, etc. In the…

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: Explain the relationship between the production function and the average costs and marginal costs…

A: Answer: Production function/Total product: production function shows the relationship between output…

Q: the envelope curve be tangential to the bottom of each of the short-run average cost curves? Explain…

A: In Economics, qualification is frequently made between the short-run and long-run. In the short-run…

Q: Explain why marginal costs increase above some level of production in the short run.

A: The marginal cost is the additional cost incurred from producing one additional unit of goods and…

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: Complete the table above Solve the short run production function every of the above table.

A: Marginal Product of worker shows the number of extra units of yield (amount) each extra worker…

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…

Q: A firm hires two workers and rents 15 acres of land for a season. It produces 150,000 bushels of…

A: Returns to scale state the effect on the output level due to the increase in the production inputs.

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.