These occur when doubling all of the inputs to a production process doubles the output. The shape of a firm's long-run average cost curve depends both on returns inputs scale in production and the effect of scale on the prices it pays for its O Decreasing returns to scale in production O Constrained optimisation problem Constant returns to scale in production O Decreasing returns to scale

These occur when doubling all of the inputs to a production process doubles the output. The shape of a firm's long-run average cost curve depends both on returns inputs scale in production and the effect of scale on the prices it pays for its O Decreasing returns to scale in production O Constrained optimisation problem Constant returns to scale in production O Decreasing returns to scale

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 21PAE

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Similar questions

What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
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?
What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
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 difference between a fixed input and a variable input?
Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?