When do firms decide to shut down production in the short run? Explain it.

Q: In the short-run, if the marginal cost of a firm in a competitive industry is upward sloping while…

A: The short-run is the time period where at least one variable is fixed and others are variable. In…

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: Why will firms in most markets be located at or close to the bottom of the long-run average cost…

A: In the long run, all the costs are the variable costs. In long run, costs are lower than that of in…

Q: Think about several different types of industries or markets and the amount of time it might take to…

A: The measure that depicts the size of business operations that are being measured by the maximum…

Q: 20 300 30 480 |40 700 50 1000 (a) Calculate the total cost, average variable cost, average total…

A: Total cost is the sum of the variable cost and the fixed cost.

Q: In the short run, the average total cost of producing 200 pizzas is $ A In the long run, the average…

A: The short run is the period where at least one factor of production is fixed and cannot be changed.…

Q: In the short run, each firm experiences a loss of $

A: We know , Profit = TR - TC  TR = Price * Quantity TR = 100 *50 TR = 5000 ATC = TCQ TC = ATC * Q  TC…

Q: In the short run, when the output of a firm increases, its average fixed cost

A: To find : What will be average fixed cost.

Q: the short run, a firm's average variable cost will increase as its output increases because

A: The variable cost refers to the cost which changes with change in the level of output.  AVC = TVC/Q.

Q: It is clear that businesses operate in the short run, but do they ever operate in the long run?…

A: When a business is established the main focus of the owner is to conquer the short-run functions and…

Q: Why will firms in most markets be located at or close to the bottom of the longrun average cost…

A: Assuming, along these lines, a firm needs to build production in the short-run, it can do as such…

Q: Each graph illustrates three short-run cost curves for firms, where ATC is average total cost (also…

A: The marginal cost curve refers to the curve that shows additional cost of production when the firm…

Q: Explain in your own words why in the short run a firm may continue to produce even at a loss…

A: A firm in the short will continue to produce until price covers it variable cost. Otherwise the firm…

Q: In the short run, if a marginal cost of a firm in a competitive industry is increasing while its…

A:

Q: 4) If AVC and ATC are both above the MR=P=AR=D line what will happen in the short-run and the…

A: Perfect competition is a market structure that has a large number of buyers and sellers who have…

Q: Draw the marginal-cost and average-total-cost curves for a typical firm. Explain why the curves have…

A: Marginal cost: Marginal expense is the adjustment in the all-out cost that emerges when the amount…

Q: Draw the MC and the ATC curves and show graphically: (a) The long-run optimal production and price…

A: (a) In the long run optimal production and price level for a firm will be at a equilibrium point…

Q: Consider the following table showing short run production:

A: Marginal product of labor or MPL is described as the increase in total production when labor is…

Q: Why is the short run marginal cost curve U- Shaped?

A:

Q: what is the importance of long run and short run production in production theory?

A: A production function is a functional relationship between the inputs which are used in the process…

Q: Show the effect of diminishing returns on the marginal and average cost curves of a firm in the…

A: diminishing returns is a  financial regulation expressing assuming one contribution to the…

Q: you assume that a firm has a U-shaped average cost curve, why would large and small firms have…

A: The economies and diseconomies of scale lead to the U shaped average cost curve.

Q: A firm produces identical outputs at two different plants. If the marginal cost at the first plant…

A: The firm seeks to maximize the profit. The profit is maximized where the MR=MC. Firm can use its…

Q: the main difference between the short run and the long run

A: Short run is a time period in which there are fixed costs and variable cost Fixed cost means the…

Q: Use this table to answer the following question. Output Total Variable Cost $1 $20 $2 $24 $3…

A: The total cost is the total expenditure done by producer in the production process. There are two…

Q: What is the difference between short-run and long-run in production theory?  *Explain thoroughly*

A: Production is defined as the process in which factors of production or inputs are put to use in…

Q: What is the difference between decreasing returns to scale and diminishing marginal product?

A: Meaning of Law of Variable Proportions: The term law of variable proportions refers to the…

Q: Give an example of a price at which this firm would want to produce and sell output in the short…

A:

Q: In the short run, behavior of production is explained by Select one: a. The law of diminishing…

A: There are two kinds of periods faced by a business company based on the variability of its…

Q: In the short run, if a firm chooses to operate and produce output, it must be the case that

A: The shutdown point of a firm comes when the price of the goods sold is less than the variable cost…

Q: If the marginal cost is increasing, do you know whether average variable cost is increasing or…

A: Marginal cost is U shaped and average variable cost is also U shaped.

Q: (c) Long-run average total cost curve is a curve that shows the lowest (Unit) cost at which the firm…

A: When a fixed cost is set to minimize average total cost for each level of production, the long-run…

Q: What is the difference between production in the short run and production in the long run? Explain…

A:

Q: How and why does a firm’s average-total-cost curve differ in the short run and in the long run

A: Short-run period is that period of time in which a firm can change its level of output by only…

Q: True or False: For an increase in output, average costs change by more in the short-run than in the…

A: Average cost: The average cost for a firm can be defined as the cost incurred per unit of output for…

Q: The main difference between the short run and the long run is that  firms earn zero profits in the…

A: There are two types of factor of production which are fixed and variable factor of production. The…