The reason why the average total cost curve is u shaped is because

Q: Why the average cost curve is a U shaped curve?

A: # The total cost per unit of output is reffered to be as the average costs.

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: When economist Jacob Viner first developed the envelope relationship, he told his draftsman to make…

A: The Long Run Average Cost (LAC) is calculated by dividing long run total costs by the amount of…

Q: Calculate average cost when total cost is 300 and quantity is 15

A: # The average of the total cost which we spend on a single good is given by the average cost.…

Q: Answer the following with the required graph. a) Describe the shape of the average fixed cost. b)…

A: The money spent to purchase the fixed and variable factor of production to produce the goods and…

Q: The government imposes a $1,000 per year license fee on all pizza restaurants.  As a result, which…

A: License fees are generally considered to be fixed costs. It is the money paid by a person using…

Q: Explain why the fixed cost has no influence at all on marginal cost.

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

Q: Why is the Average Total Cost curve U-shaped?

A: The average cost (AC) or average total cost (ATC) is the cost per unit of production. The average…

Q: How is the difference between average total cost and average variable cost impacted by an increase…

A: Average total cost is the total cost per unit whereas average variable cost is the total variable…

Q: What is a average total cost? : What is a Marginal cost?

A: The average total cost is the total cost per unit of output. It is calculated by dividing the total…

Q: The long run average cost curve is U shaped because up to a certain point you have excess K/L and…

A: Total cost refers to the total amount of expenditure incurred by the firm ti produce the given…

Q: What effect, if any, does diminishing marginal product have on the shape of the marginal cost curve?

A: According to the law of diminishing marginal returns, after a certain level adding additional units…

Q: Which of the following is always downward-sloping? a. The marginal cost curve when it is below the…

A: The firms, producers, and sellers are considered to one of the major players in the markets. The…

Q: If the marginal cost MC = 5+4Q , and the fixed cost is 4, what is the total cost function?

A: As per question, marginal cost MC= 5+4Q and fixed cost is 4. Taking integral (with respect to Q) of…

Q: What is the difference between sunk cost and fixed cost? Explain with examples.

A: Sunk costs and fixed costs are two kinds of expenses borne by a corporation in the different…

Q: Explain why the marginal cost curve intersects a U-shaped average cost curve at its minimum point.

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

Q: What explains why the long run average cost curve is u-shaped

A: First of all average cost fall in the beginning because the factor of production or the capital used…

Q: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: Show me how to arrive at Average Variable Cost?

A: Total variable cost varies with the level of production.

Q: . The marginal cost curve intersects the average fixed, average variable, and average total cost…

A: Answer to the question is as follows:

Q: Which of the following is always downward-sloping?  a. The marginal cost curve when it is below the…

A: Marginal cost refers to change in total cost with respect to change in output. Average total cost…

Q: Average cost decrease indefinitely as output expands.   Is that true?

A: Economies of scale signifies a scenario where a firm reaps the cost benefits while carrying out…

Q: What is a sunk cost? Provide an example of a sunk cost other than one from this book. Why are such…

A: Cost refers to the expenses that the firm incurs in the production process of its goods and…

Q: Differences between implicit cost and explicit cost

A: Explicit costs are defined as those costs which leads to an outlay of cash from the business. It is…

Q: What are a total variable cost and average variable cost?

A: Total Variable costs are those costs that change when the input changes. For example-wages, when…

Q: What are two examples of variable costs?

A: Variable costs depends on the level of output being produced by the firm.

Q: The vertical distance between the average total cost curve and the average variable cost curve....

A: Variable cost: The variable cost can be defined as the cost that is being borne on the variable…

Q: If we have information about workers’ marginal products, then total and average product can be found…

A: Summing the marginal values will give total product.

Q: Why is the average cost a U shape

A: Cost refers to the amount of money required to produce the goods and services by the various factors…

Q: Average Variable Cost is

A: Average Variable Cost is the Variable cost per unit or total variable cost by the output.

Q: Which of the following would be a source of economies of scale? the quantity of labour more…

A: Marginal cost is the additional cost incurred in order to produce an additional unit of output thus…

Q: If the marginal cost equals average cost, we are at the _____ point of the ____ curve.

A: Marginal cost is that cost which is incurred because of producing one additional unit of the output,…

Q: Which average cost curves are U-shaped?

A:

Q: explicit or implicit cost

A: The expenditure incurred on producing a good or service depicts the cost. Cost depends the level of…

Q: If marginal cost is less than average cost, average cost must fall when more units are produced.…

A: The marginal cost is change in total output when one additional unit of input is used.

Q: How do you find total fixed cost?

A: Total cost of production includes all the fixed cost of production and the variable cost of…

Q: The marginal cost curve passes through the minimum point of the average variable cost curve but not…

A: ATC(Average total cost), MC(Marginal cost) and AVC(average variable cost) are U shaped curves. This…

Q: How would you derive marginal cost from total cost?

A: Marginal cost is defined as the cost which is incurred by the producer in order to produce one more…

Q: Give an quantitative example of marginal and average cost.

A: Average cost is the equivalent of total fixed cost (TFC) and total variable costs (TVC) divided by…

Q: Average cost is defined as __________

A: In economics we come across the term total cost which shows the relationship between cost incurred…

Q: Why is the Average Variable cost U-shaped

A: Costs are the expenses that firms incur in the production of goods and services. A firm typically…

Q: A downward-sloping portion of a long-run average total cost curve is the result of

A: The term scale of production refers to the dimension of a firm. A small-sized firm defers lower…

Q: Is fixed cost always smaller than total cost ?

A: The question talks about the two terms i.e., fixed cost and total cost.