How and why does a firm’s average-total cost curve differ in the short run compared with the long run?

Q: Answer the following with the required graph. a) Describe the shape of the average fixed cost. b)…

A: The money spent to purchase the fixed and variable factor of production to produce the goods and…

Q: Explain why the fixed cost has no influence at all on marginal cost.

A: In the short run, a firm will have two types of cost: fixed cost and variable cost. Total variable…

Q: How is the short-run average cost curve and the long-run average cost curve-shaped? What is the…

A: Short run average cost has fixed factors of production,whereas in long run average cost there are no…

Q: How is the difference between average total cost and average variable cost impacted by an increase…

A: Average total cost is the total cost per unit whereas average variable cost is the total variable…

Q: The 50th worker produces fewer additional units of output than the 49th worker does.’ Based on the…

A: The Marginal cost is the change in total cost when one additional unit of input is used. The average…

Q: The marginal cost curve intersects the average total cost curve at the level of output where average…

A: Marginal Cost (MC): Marginal cost occurs when producing an extra unit of output. Average total cost…

Q: Explain why the marginal cost curve intersects a U-shaped average cost curve at its minimum point.

A: Marginal cost (MC): - it is the additional cost incurred due to the production of additional units…

Q: What explains why the long run average cost curve is u-shaped

A: First of all average cost fall in the beginning because the factor of production or the capital used…

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: What does average fixed cost fall with increase in output?

A: Fixed cost per unit of output is known as average fixed cost. Because the same amount of fixed costs…

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: Suppose that a small family farm sold its output for $100,000 in a given year. The family spent…

A: Given: Fuel=$25000 seed, fertilizer, and pesticides=$40000 Equipment=$25000 Other occupations=$20000

Q: Solve the attahment.

A: There are different concepts of costs in the production process such as total cost, marginal cost,…

Q: True or False The slope of the total cost curve is equal to marginal cost, or the change in…

A: Total cost It refers to all the cost or expense that is incur in a production process.It is given by…

Q: Austin's total fixed cost (TFC) is $350/month at his cupcake bakery.  Austin employs 10 workers and…

A: The amount of output produced determines the fluctuation in variable costs. Labor costs are one type…

Q: What are a total variable cost and average variable cost?

A: Total Variable costs are those costs that change when the input changes. For example-wages, when…

Q: What will happen to the average total cost if the average variable cost is falling? a. Rises B.…

A: The average Total cost if the the average variable cost is falling is also falling.

Q: Marginal cost curve always cuts the lowest point of the average total cost curve. Do you agree?…

A: Marginal Cost:Marginal cost refers to the additional cost of producing the additional unit of…

Q: In the short run, which of the following costs will not change as output changes? marginal cost.…

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

Q: Which average cost curves are U-shaped?

A:

Q: Can total cost of the firm be zero? if yes what's the production point at this level

A: Total cost of the firm is the combination of fixed cost of the firm such as rent of the workplace…

Q: If marginal cost is less than average cost, average cost must fall when more units are produced.…

A: The marginal cost is change in total output when one additional unit of input is used.

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: What is the relationship between marginal product and marginal cost? Why do you suppose that is? Is…

A: Marginal Product: The term marginal product refers to the increase in total product due to the use…

Q: if economic profit equals accounting profit, what do implicit cost equal?

A: (Q) If economic profit equals accounting profit, what do implicit cost equal? There are two types of…

Q: marginal cost curve and average variable cost (AVC) curve related?

A: The Marginal Cost shows the cost incurred on producing an extra unit of output. The Average Variable…

Q: Give an quantitative example of marginal and average cost.

A: Average cost is the equivalent of total fixed cost (TFC) and total variable costs (TVC) divided by…

Q: Explain the theoritical relationship between average variable cost and the marginal cost

A: Average variable cost is the total variable cost per unit of output.  AVC = TVC / No of units…

Q: How does fixed cost affect marginal cost? Why is this relationship important?

A: Fixed cost is the cost which does not change with the change in the output. Marginal cost is the…

Q: Is fixed cost always smaller than total cost ?

A: The question talks about the two terms i.e., fixed cost and total cost.

Q: What is direct cost? What is indirect cost? Provide detailed definitions and  example for both

A: The total cost of a product is generally categorized into direct and indirect costs.

Q: How do we calculate each of the following: marginal cost, average total cost, and average variable…

A: The total cost(TC)  is the production cost incurred on engaging various inputs i.e land, capital,…

Q: With appropriate examples explain how marginal cost is related only to total variable cost.

A: Cost Cost refers to the actual expenditure on inputs (i.e. explicit cost) and the imputed value of…

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: Explain the difference between fixed cost and the variable cost in economics.

A: In economics, cost refers to all the expense that has been incurred in order to produce goods and…

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.