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

Q: e) The short-run cost function of a company is given by the equation TC = 200 + 55q, where TC is the…

A: The short-run cost function of a company is given as: Total Cost: TC = 200 + 55q where; TC = total…

Q: Determine whether it is true or false The difference between economic profit and accounting profit…

A: According to given question In simple words economic profit is gradually referred to as in general…

Q: Which of the following statements is TRUE? O The average variable cost curve must always be…

A: The addition of fixed and Variable Cost gives us total costs, which when divided by the output give…

Q: The first two columns in the following table give a firm's short-run production function when the…

A: Given:- Price of capital=$2000 Price of labor=$500 Capital constant at 5 units

Q: Complete the table directly below by calculating marginal product and average product. Plot the…

A: Since you have posted a question with multiple subparts, we will solve the first three subparts for…

Q: Distinguish between implicit and explicit costs and give examples of each. In addition, explain how…

A: Explicit Costs are those costs that are directly observed like the cost involved in hiring labor or…

Q: 3. Consider the following production function: q = 2L +3/K Assume K = 16, derive the marginal…

A: production-function gives us the maximum output that can be achieved with various…

Q: Long-Run Marginal Costs Like all average cost curves, the long-run (LATC) curve has its own marginal…

A: In a market, marginal cost and average cost are related to each other to some extent.

Q: Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a…

A: Normal Profit is the profit that considers both the implicit as well as explicit costs. It is…

Q: Suppose a firm’s production function is K^1/3  L^2/3 Mpk= L^2/3 / 3K^2/3  MpL=2K^1/3 /  3L^1/3…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: At its current short-run level of production, a firm’s average variable costs equal $20 per unit,…

A: Given: Average variable costs (AVC) = $20 per unit Average fixed costs (AFC) = $30 per unit. Total…

Q: Table 13-17 Consider the following table of long-run total cost for four different firms: Quantity…

A: Constant returns to scale refers to situation when output increases in the same amount as the cost…

Q: Ball Bearings, Inc., faces costs of production as follows: Total Fixed Costs Total Variable Costs…

A: Total Cost = Total Variable cost + Total Fixed costAverage cost = Total Cost/Quantity Marginal cost…

Q: 6. Consider a firm with the following total cost function: TC = 125 +4Q+15Q² (a) What is the measure…

A: Answer - A Answer - Need to find- The measure of firm's economy of scale  Given in the question- TC…

Q: 1 2. Short-run versus long-run costs and expenditur Aa Aa The following isoquants depict the…

A: In the long run, all the factors of production are variable whereas, in the short run, at least one…

Q: a. Is it possible to have diminishing returns to a single factor of production and constant returns…

A: Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: 1. For each of the following production functions, determine whether there areincreasing, constant…

A: A production function shows the maximum level of output that can be produced with the help of…

Q: Complete the following table by calculating marginal product and average product.       Plot the…

A: INPUTS OF LABOR TOTAL PRODUCT MARGINAL PRODUCT AVERAGE PRODUCT 0 0 0 - 1 15…

Q: These occur when doubling all of the inputs to a production process doubles the output. The shape of…

A: Returns to scale denote the relationship between inputs and outputs.

Q: Assume that in the short run a firm is producing 1,000 units of output, has average total costs of…

A: Here given that, Short run a firm is producing 1000 units of output , Q = 1000 units  Average total…

Q: Question #05 The short-run cost function of a company is given by the equation TC=200+55q, where TC…

A: Answers   TC=200+55q a) Fixed cost is that cost that is constant throughout all the quantities of…

Q: 1. For each of the following production functions, determine whether there are increasing, constant…

A: Returns to scale shows the proportional change in the output when the inputs are changed by a…

Q: Suppose that Hyundai increases the amount of capital, labor, and other inputs it uses by 10% and as…

A: When product is manufactured and put into production process, cost  takes place and process of…

Q: Which of the following statements are true regarding the concept of returns to scale? [Check all…

A: Let production function  Q = F(L, K) Double the inputs by a scalar z > 0. Q = F(zL, zK) If F(zl,…

Q: total output

A: An increasing-cost industry tends to occur because the entry of new firms as being prompted by an…

Q: Suppose that the following statement is true: "when L increases from 20 to 21, average product of L…

A: Average product= OutputLabor Therefore, Output=Average Product×Labor As given: At L=20, Average…

Q: explain what is meant by explicit; implicit; and sunk costs. How are they used to calculate…

A: All the costs that are linked or incurred to the business activities of a company and are easily…

Q: We classify Three Possible Long-Run Average Cost Curves for a Multiplant Firm; given the following…

A: A planning curve is a long-run average cost curve. This is because a company aims to create an…

Q: Is each of the following statements true or false? In either case, briefly justify your answer. (a)…

A: Answer a. Economies of scale describe a condition in which the average cost reduces as the volume of…

Q: Assuming decreasing returns to scale, illustrate the long run average cost curve under the following…

A: There are basically two types of economies, real economies and pecuniary economies.

Q: A firm has a Cobb-Douglas production function, q = 2L^0.5K^0.5 . If it faces prices of w = 20 and r…

A: q=2L0.5×K0.5q=2L0.5×(100)0.5q=2L0.5×10q=20L0.5L=q202L=q2400

Q: Which of the following are likely to be fixed costs and which variable costs for a chocolate factory…

A: Fixed Cost refers to the cost that remains constant over a period of time irrespective of the amount…

Q: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars) 0 180 0 1 180 80 2 180 140 3 180…

A: Solution: (a)Formula used (i) Total cost (TC) = Total fixed cost (TFC)+ Total variable cost (TVC)…

Q: The following represents the short-run average total costs for a large shipping company.     Short…

A: Answer: Introduction: Short-run a period of time where the fixed resources can not be changed. In…

Q: The term "constant returns to scale" describes a situation where expanding all inputs dramatically…

A: Returns to scale(RTS) is a concept that tells how the total output(Y) changes when all the factors…

Q: Using the data in the above table, the average fixed cost of producing 16 units is

A:

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: Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a…

A: Implicit costs = $200,000 Explicit costs = $10,00,000 Number of units = 4000 units Selling price =…

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.