Why Law of Diminishing Returns is a short run law?

Q: ATC $ MC MC ATC MR Quantity (a) MR Quantity (b) ATC MC MR Quantity (c) Q23Economic loss is shown in…

A: A firm will tend to incur losses if it is not able to cover its revenue. If total cost exceeds total…

Q: Find the output gap.

A: Y = C + I + G + NX Output gap = Y (actual output)- Y* (potential output)

Q: rease in the short run ease in the short run

A: Cash balance refers to the part of income that people want to hold as cash in hand.

Q: the new equilibrium point in the short run

A: AS curve shifts when the factors affecting aggregate supply changes. It will shift to right when the…

Q: In the long run, fixed costs are

A: Total Cost: The total cost of a commodity refers to the sum of fixed costs (FC) and variable cost…

Q: If a firm produce zero, its cost must be zero in the short run? C True C False

A: The total cost of production can be divided into two components namely fixed cost and variable cost…

Q: Which of the following sta (a) VAC is maximized at its intersection with MC. (b) The higher the…

A: Production: It is a cycle of consolidating different material data sources and insignificant data…

Q: Factors that cause the short-run supply curve to change are factors that affect

A: In the short run supply can be able to change with limited resources.

Q: Austin owns the Fruit Bowl Inc company. Which of the following would be short run decisions for…

A: There are many types of inputs used in the production of goods and services. Two of them are capital…

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: Hurley owns a restaurant. To operate the store, he needs to hire labor (L) ar capital (K). The…

A: Given  Short run production function: QL,K¯=L0.5K¯0.5                    .... (1) The market price…

Q: Suppose that firms in the zipper industry have the production technology: F(K,L)=4K^(3/4) * L^(1/4)…

A: Answer: Given: Production function: FK,L=4K34×L14 Cost/price of labor = 27 Cost/price of capital =??…

Q: Give two example of fixed cost

A: Cost is the total expenditure incurred by a producer in producing a good or services. Cost has two…

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: 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: QUESTION 1 Suppose the short-run production function is given by f(x)= 8\x What is the Marginal…

A: A production function illustrates the relationship between the quantity of inputs used and the…

Q: The basic characteristic of the short run is that?

A: Short-run is a period of time in which at least one input is fixed and the others are variable. It…

Q: Which of the following statemenls O In the long run the firm is able to earm a normal profit but not…

A: Market structure helps in understanding the characteristics of different forms of markets.

Q: The law of diminishing returns states that

A: GIVEN   The law of diminishing returns states that is

Q: Is it possible to avoid Diminishing Marginal Return? Why? Explain

A: Law of diminishing returns postulates that as more units of a variable input are used with a fixed…

Q: Productive efficiency means output (production) is produced in the long run at

A: A perfectly competitive market is the type of market structure in which several buyers and sellers…

Q: Rick's ski board factory has the Total Cost function: TC(Q)=0.02Q³ +300Q +200 where Q is the number…

A: The total cost function is the sum of the variable and the fixed cost. The variable cost is the cost…

Q: Assume a firm is trying to maximize output subject to a budget and is currently in the long run…

A: The long-run is the timeframe when all expenses are variable. The long-run relies upon the points of…

Q: What is the LAW OF DIMINISHING RETURNS, and why is this law considered a short-run phenomenon?

A: The Law of Diminishing Return: It occurs when the employment of input with the other fixed input of…

Q: Hi, I am studying chapter 11 from Microeconomics 21st edition. I am still confused about a certain…

A: The marginal cost curve of a firm cut the average total cost curve at its minimum point. In initial…

Q: When marginal product is zero, profit is at its maximum level

A: Marginal product refers to the additional amount of output produced from the use of additional…

Q: In the short run, the firm should continue to produce if and only if a.Price exceeds average total…

A: Total fixed cost is independent of output produced whereas  variable cost varies with the level of…

Q: Suppose a perfectly competitive firm uses labor and capital to produce. In the short run, the…

A: In the short run production decision depends on average variable cost as firms have to incur fixed…

Q: (d) If the minimum point of the short run ATC curve for all firms (existing and potential) is also…

A: * SOLUTION :-  *D)

Q: Distinguish between short-run and long-run supply curves.

A: Short run refers to a period of time during which some manufacturing elements are constant while…

Q: The production period during which the firm can alter its use of all inputs is known as the Olong…

A: The goods utilised in the creation of other commodities and services are referred to as inputs.…

Q: What are some examples to illustrate Henry Hazlitt's lesson that what is true in the short run may…

A: According to Henry Hazlitt's lesson: Actions that are advantageous in the short run can cause…

Q: A9. The diagram below depicts a firm's short-run production function and two isoprofit lines (and).…

A: A firm hires factors of production from the household sector in the form of land, labor, capital and…

Q: On the graph the supply in the Rest of the World has shifted from Sstart to S2 and the market in the…

A: For answering this question, we will analyse each of the given options separately.

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: Explain the law of diminishing returns.

A: In economics, various laws and theory are used to explains specific market activity. These laws arr…

Q: If the firms in a market have accounting profits that are larger than their implicit costs, then, in…

A: Answer: If the firm has accounting profit larger than the explicit cost it means the firm is earning…

Q: Why is it reasonable to think of normal profit as a type of cost to the firm?

A: In the short run, firms usually try to temporarily shut down their operations when the prices are…

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…

Q: Explain the idea behind diminishing marginal returns and give a real-life example.

A: Diminishing Marginal Returns happen while expanding one unit of creation, while holding different…