Quantity 1 Firm A Firm B Firm C A 3 4 5 6 7 10 21 32 43 54 66 80 10 15 18 23 35 50 65 10 19 28 37 46 55 60 Indicate whether each firm experiences economies of scale or diseconomies of scale. (N and diseconomies of scale in another, make sure to select both columns.) Firm Economies of Scale Diseconomies of Scale B 2 C nt firms: 0

Quantity 1 Firm A Firm B Firm C A 3 4 5 6 7 10 21 32 43 54 66 80 10 15 18 23 35 50 65 10 19 28 37 46 55 60 Indicate whether each firm experiences economies of scale or diseconomies of scale. (N and diseconomies of scale in another, make sure to select both columns.) Firm Economies of Scale Diseconomies of Scale B 2 C nt firms: 0

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 28RQ: What shape of a long-run average cost curve illustrates economies of scale, constant returns to...

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Similar questions

Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
Are fixed costs also sunk costs? Explain.
A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?
A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
How does fixed cost affect marginal cost? Why is this relationship important?
Would you consider an interest payment on a loan to a film an explicit or implicit cost?