Minimum efficient scale for production of a good or service: Select correct one : a) is the point at which diseconomies of scale begin for a particular firm. b) is the point at which economies of scale begin for a particular firm. c) is the rate of output at which long-run average costs reach a minimum d) applies only to firms with U-shaped long-run average cost curves.

Q: Order the following components of a long run average cost curve as output expands based on which…

A: In the long-run, an average cost curve shows different phases of production when average cost…

Q: The MC curve must be * rising when TC is rising. less than AFC when the average cost is rising.…

A: Every production unit incurs certain amount of costs during production processes. These costs are…

Q: Costs which increase with an increase in output are called________________ Costs which do not…

A: There are two main components of the total cost(TC) that a firm incurs. One is the variable cost(VC)…

Q: If a firm is experiencing economies of scale, doubling inputs will: double output. more than double…

A: Economies of Scale: The economies of the scale refer to the gain that arises due to the increase in…

Q: Diseconomies of scale occur when:A) average total cost increases as output increases.B) average…

A: The process of production is the combining of the raw materials and the skills and knowledge of the…

Q: Businesses wanted to reduce their cost to the minimum without compromising the product quality and…

A: Companies benefit from economies of scale when their production gets more efficient. Economies of…

Q: If a production function exhibits decreasing returns to scale, average cost will decrease as output…

A: Average cost is the per-unit cost of output.

Q: Normal profits are Multiple Choice   the profits reported by accountants on a firm's annual…

A: ANS Profit is given by subtracting Total Cost (TC) from Total Revenue (TR). Mathematically it is…

Q: ($/Unit) Marginal Cost Q1 Quantity (Units per time period) In the above diagram, marginal cost…

A: Concept: Marginal cost refers to the cost incurred by a firm to produce an additional unit of…

Q: Which of the following would be exhibited if a doubling of output can be achieved without doubling…

A: The change in the output produced when the inputs are changed by a particular proportion is known as…

Q: If all resources used in the production of a product are increased by 20 percent and output…

A: In economics, the cost of production is outlined because the expenditures incurred to get the…

Q: When a firm experiences economies of scale in production, a. long-run average total cost declines as…

A: In the long run, firm can change its all factors of production and produce the output where the…

Q: Short-run average total cost      shows the minimum average total cost for each level of output…

A: Answer: Correct option: option 4 (might have a flat portion that indicates a constant average cost…

Q: The average variable cost curve and average total cost curve tend to converge as output rises…

A: ATC = TC/Q AFC = TFC/Q AVC = TVC/Q   TC = TFC + TVC TFC = TC – TVC AFC = AC - AVC

Q: Diseconomies of scale occur mainly because

A: Diseconomies of scale is associated with the increasing cost per unit with increase in the scale of…

Q: If a firm has economies of scope, which of the following would best decribe what the firm is…

A: Economies of scope is defined as a situation where the production of one good lowers or reduces the…

Q: Q10 A firm's least-cost position for producing a given output level occurs at that point where…

A: Q10 A firm's least-cost position for producing a given output level occurs at that point where…

Q: Fixed costs of production in the short run: a. Are low in proportion to variable costs in the short…

A: The firm can increase production by changing its factor of production. However, the production scale…

Q: When a firm doubles its inputs and finds that its output has more than doubled, this is known as а.…

A: Inputs and output are important for business. Inputs are raw materials, equipment, and machinery…

Q: ) The short run is a time period in which: (a) all resources are fixed.…

A: In economics, we study the interaction and the decision-making of the economic agents at the…

Q: You are given the following long-run cost function: TC = 200Q - 25Q2 + 1.5Q3 What level of Q will…

A: Here the firm's total cost=TC = 200Q - 25Q2 + 1.5Q3 here the total fixed cost-TFC=0 (since this is a…

Q: The economies-of-scale curve is a long-run average cost curve, because       it allows all factors…

A: Basics:- Short run:- It is a period of time in which fixed cost remains constant because all factors…

Q: Which of the following is wrong? Select one: a. Economies of scale refer to the production of two or…

A: Long run average cost curve is locus of minimum point of the short run average cost curve.

Q: he supply curve overtime is more elastic than the supply curve over the short period of time…

A: Supply curve shows the relationship between price and quantity supplies by the producers. Since…

Q: Diseconomies of scale exist over the range of output for which the long-run average cost curve is a.…

A: The firms are considered to be the producers who work with the motive of earning maximum possible…

Q: 3. What are the differences between the internal and external economies of scale?

A: When it increases its level of output, it often experiences some cost advantage, referred to as…

Q: verage fixed cost (AFC) A) rises as output rises. B) rises as output falls. C) falls as output…

A: Average fixed cost (AFC): - it is the per-unit fixed cost or we can say the average value of fixed…

Q: Fixed costs are associated with Multiple Choice   highly adjustable inputs such as labor.   both…

A: Fixed costs are costs that does not change with increase or decrease in production/sales. They are…

Q: firm aims at minimizing its cost. Which of the following statement is TI A. The firm's technology…

A: In economics, market structure describes how enterprises are distinguished and classified depending…

Q: Consider a firm that enjoys economies of scale. • If this firm wants to produce 25% more output, it…

A: In a market, economies of scale refers to the situation when a firm is experiencing an inverse…

Q: The long run is best defined as a time period )during which prices of other goods change. that is…

A: The short-run (SR) is a time span where the prices of inputs are constant but the prices of output…

Q: Which of the following statements is true? Costs are always explicit, never implicit. Costs are…

A: Cost is the expenditure incurred by the firm on purchase of factors of production for the production…

Q: The feature that distinguishes short-run from the long-run is the*

A:

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: The downward-sloping segment of the long-run average cost curve corresponds to *…

A: In production activity, time period under consideration determines the nature of costs faced by the…

Q: How do you solve this and can you show me step by step?

A: The cost function of two plants can be expressed as follows.

Q: For a constant returns to scale production function a. marginal costs are constant but the average…

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

Q: Businesses wanted to reduce their cost to the minimum without compromising the product quality and…

A: Economies of scale:- Economies of scale can be explained as the cost advantages that businesses gain…

Q: Which of the following would shift a firm's short-run cost curves downward? a.an increase in excise…

A: The minimum cost impact of output changes for a specific plant size is referred to as a short-run…

Q: When a firm triples its inputs and finds that its output has less than tripled this is known as:…

A: Production function is a definite mathematical relation between factor inputs and output generated,…

Q: Consider a firm that suffers diseconomies of scale. If this firm wants to produce half as…

A: "Diseconomies of scale occurs when each item produced cost more and more as a firm continue to grow…

Q: Average variable cost and average total cost get closer as output increases because a) productivity…

A: ATC = AVC + AFC So, AFC = ATC - AVC (= distance between ATC and AVC curves) Also, AFC = TFC / Q As Q…

Q: When production is at level zero then the value of ___________ cost is always zero.

A: Total cost = fixed cost + variable cost Fixed cost always remain constant even when output is zero.…

Q: Which of the following results when an increase in all inputs results in a more-than-proportionate…

A: Answer - a) Diseconomics of Scale -  It is the opposite of economics of scale . Diseconomics of…

Q: The output level at which long-run costs are minimised is known as: (a)  Average fixed cost; (b)…

A: Total cost is the cost incurred by the firm on hiring factors of production to produce the final…

Q: The minimum efficient scale of a firm: Multiple Choice is realized somewhere in the range of…

A: Minimum Efficient scale is a point between economies of scale and diseconomies of scale.

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.