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Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Production And Costs

Section8.4: Costs Of Production: Total, Average, Marginal

Problem 1ST

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5. Use the graph to answer the question

Between points C and D, the long-run average total cost curve is characterized by ________ because the firm is experiencing ________ returns to scale.

A-constant returns; constant

B-economies of scale; increasing

C-economies of scale; constant

D-diseconomies of scale; increasing

E-diseconomies of scale; decreasing

7.A firm's implicit costs are $10,000, explicit costs are $5,000, and its total revenue is $10,000. This firm is earning

A-normal accounting profit

B-positive accounting profit of $5,000

C-positive economic profit of $5,000

D-normal economic profit

E-negative accounting profit of $5,000

10
9
8
Long Run Average Total Costs
7
6A
D
4
в
3
1
1 2 3
5
6 7 8
6.
10
Output
Cost
2.

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