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

Q: When economist Jacob Viner first developed the envelope relationship, he told his draftsman to make…

A: The Long Run Average Cost (LAC) is calculated by dividing long run total costs by the amount of…

Q: Calculate the Marginal Cost at Q 200? Calculate the Marginal Cost at Q 300? Calculate the Average…

A: the marginal cost is the change in the total cost that arises when the quantity produced is…

Q: The diagram shows the short-run cost curves of a firm. Which statement is CORRECT? costs output

A: OPTION A is correct. Curve 1 is Average Fixed Cost Curve AFC = TFC/Q Since TFC is positive at levels…

Q: What happens to the average fixed cost, when the output of a firm increases.

A: # In an economy, the average fixed cost is referred to be as fixed cost per unit of output produced.…

Q: What is the difference between sunk cost and fixed cost? Explain with examples.

A: Sunk costs and fixed costs are two kinds of expenses borne by a corporation in the different…

Q: suppose Jack produces chocolate with two inputs : factory and labor.  If the workers become more…

A: Labor productivity has increased. Labor productivity and cost of production (except fixed cost) are…

Q: Why does as output increases, average variable cost initially declines and eventually begins to…

A: In an economy, the cost is analyzed in different ways, such as total cost, marginal cost, average…

Q: Suppose that the cost of all inputs (both labor and capitol) decreases. What will happen to the…

A: In economics, inputs are considered as factors of production. That means, inputs are those factors…

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: 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: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: Explain why an increase in the price of an input must typically cause an increase in the long-run…

A: As we know in long run , firms can increase both factors simultaneously and due to this firm…

Q: What effect might a decrease in the  demand for high definition television have on the short-run…

A:

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: 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: Month (m): 4 Day (d): 1 Use the two numbers…

A: Fixed cost is that cost which are not depend on the quantity. It's remains same at any output level.…

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

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Q: What are the advantages of internal economies of scale ? Explain shortly.

A: Internal economies of scale mean the company improves output when the average cost of the product…

Q: For each of the following events identify which of the determinates of demand or supply are…

A: 1. A stock market crash, will bring about a decrease in the wealth of the people, which will result…

Q: is it true that the marginal cost curve intersects the average variable cost curve at the break-even…

A: Marginal cost: It is the cost that is incurred by the firm to produce one extra unit. Average…

Q: Use the table below to answer the following question. Units Total Fixed Cost Total Variable of…

A: Marginal cost eventually we can say that it is the actual change in the value of the total cost…

Q: Suppose Marcus produces chocolate with two inputs: factory and labor. If the workers become more…

A: If the workers become more productive due to the training provided to them, the output would also…

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: An increase in the firm's cost of a fixed input will in the long-run, cause the

A: An increase in the firm's cost of a fixed input will increase the fixed cost of firm. An increase in…

Q: Why is the Average Variable cost U-shaped

A: Costs are the expenses that firms incur in the production of goods and services. A firm typically…

Q: Why do most fixed costs become variable costs in the long run?

A: Variable costs- Due to the sum of a product or service being generated, variable costs change. The…

Q: explain why the lower marginal cost firm can never produce the same as the high marginal cost firm

A: marginal cost is the cost of producing additional unit of product . and it helps to the firm to…

Q: The following is a total cost curve. Sketch the corresponding marginal cost curve. If the price of…

A: ‘Marginal cost’: ‘Marginal cost’ is the change in ‘total cost’ in respect to change in per unit of…

Q: Explain why marginal costs increase above some level of production in the short run.

A: The marginal cost is the additional cost incurred from producing one additional unit of goods and…

Q: Consider the following table illustrating the production function of gadgets. Furthermore, suppose…

A: Answer to the question is as follows :

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

A:

Q: Explain how a change in the price of one input factor changes a firm’s long-run expansion path?

A: The firms, and businesses are the entities who are considered to be of utmost importance for the…