True or false. The U shape of the long-run ATC curve is the result of diminishing returns.

Q: Which of the following is true in the short run at the output level where average total cost is at…

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

Q: A firm encountering economies of scale over some ange of output will have a: rising long-run average…

A: The economies and diseconomies of scale affect the shape of average cost curve.

Q: The marginal-cost (MC) curve cuts through the average-total-cost (ATC) curve and the…

A: Answer to the question is as follows:

Q: True or false? a. The AFC curve can never rise. b. Diminishing marginal product is a long-run…

A: The AFC stand for Average Fixed Cost curve which refer to that price of a commodity in the economy…

Q: Beyond a certain level of output, the short-run marginal cost witl rise because there is no fixed…

A: Law of diminishing return to scale implies that as the number of a variable input is raised keeping…

Q: Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in…

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

Q: Which of the following is true in the short run at the output level where average total cost is at…

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

Q: Rising short-run average variable costs of production for a firm indicate that   Question 4 options:…

A: Average variable costs are the costs incurred on variable factors or inputs per unit of output. The…

Q: The increase in total cost that results from producing one more unit of output is the marginal cost.…

A: The firm produces various goods and services which incurs cost. The firm would result in the…

Q: Relate the law of diminishing returns to a firm’s short-run production costs.

A: The short-run is the period where few factors of production are fixed and few are variable.…

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: Fixed costs differ from sunk costs in that a firm can avoid fixed costs by not producing anything

A: Avoidable costs are costs that do not occur if the activity is not performed. For example, supply…

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: The differences between average total costs and average variable costs declines as a firms output…

A: The difference between average total cost and average variable cost declines as a firms output…

Q: At the short-run break-even price, the firm A) may be earning a positive or negative profit…

A: At the marketplace, break-even point is considered as the position where a firm or an individual is…

Q: Which of the following would increase a firm's average total costs? economies of scale an increase…

A: Average Total Cost: The average total cost (ATC) is the per-unit cost of producing goods and…

Q: A firm has the following total revenue and total cost schedules: TR = $2Q. TC = $5,500 + $1.3Q.…

A: Given:- TR=$2Q TC=$5500+$1.3Q To calculate:- Break even output level and profit at 8600 unit sale=?…

Q: A firm doubles the quantity of all resources it employs and, as a result, output doubles. Which of…

A: By doubling the inputs that are employed in producing the good, will not increase the variable cost…

Q: A firm is producing 20 units with an average total cost of $25 and marginal cost of $15. If it were…

A: Costs are the expenses that firms have to incur in all of their production activities.

Q: If the ATC curve is continually declining, what does this imply about MC curve? Explain your answer

A: Average Total Cost: The average total cost is the cost per unit of output. It can be determined by…

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: In the given figure, short-run cost curves are depicted. What role does the graph's Curve Y…

A: "Cost curves in economics represents a graph of the costs involved in the production process as a…

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

A: Answer to the question is as follows:

Q: If an increase in output size results in reductions in average costs, this is known as:…

A: An increase in the level of production increases the size of the output. This leads to a fall in the…

Q: Which of the following results from bureaucratic red tape, breakdown of top-to-bottom communication,…

A: The Diseconomies of scale are the consequence that occurs because of bureaucratic red tape,…

Q: When a firm experiences increasing returns to scale a. its AFC will decrease. b. its AFC will…

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…

Q: This are the additional costs that result from increasing the output level by one or more units.

A: GIVEN   This are the additional costs that result from increasing the output level by one or more…

Q: The MC curve crosses the ATC curve at ATC's minimum, because A. ATC is falling when MCATC B. ATC is…

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

Q: Which of the following is correct regarding the shape of total fixed cost curve (TFC) ? (A)…

A: According to the given question Total fixed cost curve in simple words relatively refers to the…

Q: A firm with positive fixed costs encounters CRS and then DRS as it expands production. Show the…

A: Constant return to scale where MP is a horizontal line and In Diminishing returns to scale MP is…

Q: Solve correctly all the subparts Q)A firm has the following total revenue and total cost schedules:…

A: Profit is the difference between total revenue and total cost.

Q: It costs a firm C(q) to produce q units of output. If C(q) = q° – q² what kind of returns to scale…

A: Given  Cost function  C(q)=q3-q2  To know the return to scale of of production technology, we need…

Q: The reason the marginal cost curve eventually increases as output increases for the typical firm is…

A: The marginal cost of production is the difference in total production costs caused by adding one…

Q: A firm has the following total revenue and total cost schedules: TR = $3Q. TC = $4,000 + $1.7Q.…

A: Break-even is the point at which revenue and total costs are equal, indicating that the business is…

Q: The long-run ATC curve is often called the firm’s:   a. planning curve. b. capital-expansion path.…

A: The long-run average total cost curve is known to be a metric that indicates the average cost of the…

Q: The production function is y = (L^0.5)(C^0.5), this technology exhibits constant returns to scale.…

A: Production function can exhibit constant returns to scale, decreasing returns to scale or increasing…

Q: Select all that are true regarding profit: (please choose all the answers that are correct)…

A: Profit refers to the income earned by the fourth factor of production i.e. the enterprise from a…

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: 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: 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: Variable costs are         sunk costs.        costs that change every day.        costs that change…

A: Costs are the expenses that a firm has to incur in the production of goods and services.

Q: Why do we refer to the long-run average cost curve as a "boundary"? a. The points below the curve…

A: * ANSWER :-  *(46) * The OPTION E (The points on the curve represent a boundary between fixed factor…

Q: Consider the statement: “Total output starts falling when diminishing returns occur”. Do you agree…

A: "Total output starts falling when diminishing returns occur." It is a disagreeable statement as…

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.