Q1. Define fixed and variable costs of production. Why do you think bigger firms may have lower average total cost (ATC) than smaller firms? Explain.

Q: Suppose you own a television factory and at your current level of output, you have average total…

A: Meaning of Average Total Cost (ATC): The term average total cost refers to the addition of the…

Q: X and Y are both factors of production. X's marginal product is 30 and Y's is 20. X is $5 each and Y…

A: A profit maximizing firm recruit the resource at the point where the marginal product of resource…

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 two systems of production, which produce the same quantity.   A (assemble…

A: Given information Assemble by hand system A: 35 workers and 1 robot Assemble by robot system A: 5…

Q: Identify and describe three examples of economies of scale and three examples of diseconomies of…

A: Companies benefit from economies of scale as their production becomes more productive. Economies of…

Q: A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x…

A: If a firm wants to minimize the cost of production when it distributes its total production between…

Q: A firm’s total cost of production is given by TC=100q+100q^2. Are the returns to scale increasing,…

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

A: The diminishing returns occurs in the short run. All factor of production are not variable in the…

Q: Q47 In the long run, the law of diminishing marginal returns... a. Sometimes holds, depending on…

A: Option E Law of diminishing marginal returns shows that when an additional unit of production is…

Q: Assume that the marginal cost of production is increasing. Can you determine whether the average…

A: AVC is the cost which is measured by dividing average cost by the quantity of output produced.  MC…

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

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Q: X and Y are factors of production. X's marginal product is 30 and Y's marginal product is 20. X=5…

A: Total cost is minimized when (MPx / Px) = (MPy / Py) Here, MPx / Px = 30/5 = 6 MPy / Py = 20 / 4 = 5…

Q: In 2009 General Motors (GM) announced that it would reduce employment by 21,000 workers. What does…

A: In microeconomics, the study of the resource market where the demand for the factor is a derived…

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: Indicate how each of the following would shift the (1) marginalcost curve, (2) average-variable-cost…

A: Hi, thank you for the question. As per our Honor code, we are allowed to attempt only the first…

Q: Find the minimum cost of producing 30000 units of a product, where x is the number of units of…

A: Cost minimization problem of the firm: Min 91x +96y  subject to constraint 30,000 = P(x,y) =…

Q: Find the cost minimizing combinations of capital and labor a firm should employ in the following…

A: Given production function: q=K1/2L1/2       .......... (1) Let w be the wage rate and v is the cost…

Q: Assume that the marginal cost of production is less than the average variable cost. Can you…

A: Average Variable Cost refers to the variable cost per unit of output. It can be calculated by…

Q: State two examples of the fixed cost and two examples of the variable cost in economics

A: According to the given question Fixed cost are those cost in economics which are basically and…

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

A: Average Price The total cost is divided by the number of things produced to get the average cost.…

Q: A production function for a good Q uses inputs of labor (L) and capital (K) and takes the form Q=LK.…

A: Cost  The number of goods and services necessary to produce or manufacture is referred to as the…

Q: curve II is the

A: In this figure there are three curves they are Total cost, Total fixed cost and Total variable cost.

Q: ( Relationship Between Marginal Cost and Average Cost ) Assume that labor and capital are the only…

A: Fixed cost is independent of output produced. Whereas variable cost varies with the level of…

Q: Which of the following is an implicit cost of production?   16:   A)  the utility bill paid to…

A: please find the answer below.

Q: A firm has access to two production processes with the following marginal cost curves: MC1 = 0.25x…

A:

Q: Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be…

A: A firm's fixed costs are costs that do not change. It is irrespective of whether production or sales…

Q: Question 4' A firm's long-run total cost is TC(Q)=402-10Q²+Q³. Over what range of output does the…

A: Total cost of production is the total expenditure incurred by the firm on the factors of production…

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: uppose that you are the manager of a company that vaccinates human beings for biological diseases.…

A: Given: Physician costs= $500 per day (for an annual salary of about $175,000) The daily cost for the…

Q: Is it true that in a short-run production process, the marginal cost curve eventually slopes upward…

A: No, It's not valid because the MC curve is usually upward-sloping, and there exists a decrease in…

Q: If a paper mill shuts down its operations for three months so that it produces nothing, its will be…

A: Variable cost Variable expenses are volume-related and alter as production levels change. Raw…

Q: Rafael quit his job paying him $74,000 per year to be a consultant. Last year he started a business…

A: Explicit cost: It is the actual monetary expenditure required to run a business.  Implicit cost: It…

Q: please pick an example of three types of costs that a business can incur and briefly explain whether…

A: Fixed Costs are those costs that remain constant at all levels of output.  Variable Costs are those…

Q: Suppose that the production of Y uses two inputs, L and K. L can be any positive real number, while…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

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: 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: Why would labor be treated as a variable cost? labor costs will decrease as the firm produces more…

A: Fixed cost refers to the cost which remains same at all levels of output. It is independent of…

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

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

Q: 20.3 (0) A firm uses labor and machines to produce output according to the production function f(L,…

A:

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.