Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale and constant returns to scale

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

A: In the long run, a firm adjusts the different factors of production that are fixed in comparison in…

Q: A firm's short-run average cost curve is U-shaped. Which of these conclusions can be reached…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: Refer to the Long Run Average Total Cost curve below to answer the following questions:

A: Economies of scale occurs when LRAC decreases as output increases. In the given curve, LRAC…

Q: Which of the following statements best represents a difference between short-run and long-run cost?…

A: In the production function, different inputs are used to produce the final output. Each input has…

Q: The long-run is a period of time long enough so that all inputs, including facility and equipment,…

A: PLEASE FIND THE ANSWER BELOW.

Q: Distinguish between/among The short run average fixed cost, average variable cost and average total…

A: In the short run the inputs are both fixed and variable, so all the costs incurred are also fixed…

Q: The long run average cost curve is U shaped because up to a certain point you have excess K/L and…

A: Total cost refers to the total amount of expenditure incurred by the firm ti produce the given…

Q: Please define the long cost curve and the short run cost curve in your own words but not more than…

A:

Q: Explain the relation between average variable cost and marginal cost for both the short-run and…

A: Cost Curves show the relation between the costs that a firm incur in the process of production and…

Q: Draw a long-run average cost curve for a firm that exhibits economies of scale, constant returns to…

A: The total production process of a firm/company is an amalgamation of various costs, the optimum…

Q: Consider the following types of firms. For each one, the long-run average cost curve eventually…

A: The expenses that are being incurred for carrying out transactions of the business are known as…

Q: Why do Economies of Scale Occur? A. Large firms cover their fixed costs by producing lots of units…

A: Fixed cost is constant and remains same at all levels of output. Average cost refers to total cost…

Q: Define economies of scale and explain why they might arise. Define diseconomies of scale and explain…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

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: Average cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then…

A: Marginal cost is nothing but the additional cost required to produce one extra unit while average…

Q: Evaluate the view that the main goal of firms will always be cost minimization.  You are interested…

A: 1) The main goal of the firm is cost minimization. This is because if the firm minimises the cost,…

Q: Explain the general shape of the long run cost curves in relation to economies and diseconomies of…

A: The shape of long run cost curve changes depending on the returns to scale.

Q: Use the concepts of economies and diseconomies of scale to explain the shape of a firm’s long-run…

A: Economies of scale refer to the cost advantages that are derived from the expansion of the scale of…

Q: A business incurs the following costs: • Labor: $120/unit • Materials: $45/unit • Rent:…

A: Total fixed costs are the costs that are unavoidable and have to paid irrespective of the level of…

Q: If a firm has economies of scale, it must have increasing returns to scale. True or false? Explain.

A: The return to scale states the change in the output with the proportionate increase of all the…

Q: Explain the following statement by using a graphical analysis: “Shape of the short-run cost curves…

A: The shape of the short-run total cost (TC) curve is cubic and that of the average cost (AC) curve is…

Q: Distinguish between the short-run and long-run production decisions and illustrate their impact on…

A: Meaning of Production Function: The term production function refers to the situation under when a…

Q: The Mini-Case "Economies of Scale at Google" describes economies of scale for Google Cloud Storage.…

A: The objective of the following assessment is to evaluate the marginal cost and average cost for the…

Q: You are given the following long-run cost function: TC = 200Q - 25Q2 + 1.5Q3 What level of Q will…

A: Here the firm's total cost=TC = 200Q - 25Q2 + 1.5Q3 here the total fixed cost-TFC=0 (since this is a…

Q: The economies-of-scale curve is a long-run average cost curve, because       it allows all factors…

A: Basics:- Short run:- It is a period of time in which fixed cost remains constant because all factors…

Q: Which of the following statements is a reflection of the fact that the average fixed cost falls as…

A: Total cost (TC) is the sum of fixed cost (FC) and variable cost (VC). i.e., TC = FC + VC…

Q: Explain why the red curve is an incorrect representation of a long-run average cost curve. Note: the…

A: The average cost is the called the per unit cost of production. The AC = TC/Q. The long run Average…

Q: The portion of a long run average cost curve that is downward sloping is called the range of: Group…

A: The long-run average cost curve is the cost curve which helps to analyze the cost function of the…

Q: . If a firm has economies of scale, it must have increasing returns to scale. True or false? EXPLAIN…

A: Economies of scale provides cost advantage to the firm.Firm is able to lower average cost through…

Q: Provide a diagram that illustrates, for the short-run analysis, the average cost function, the…

A: The firms, and businesses operate with the motive of enhancing their profits, and minimizing their…

Q: Use the concepts of economies and diseconomies of scale to explain the shape of a firm’s long-run…

A: Economies of scale are the profits or advantages that firms earn due to their size of the operation.…

Q: Evaluate the view that the main goal of firms will always be cost minimization.

A: The cost of the firm when producing output would be the cost incurred by the firms on the factors of…

Q: Consider a firm that enjoys economies of scale. • If this firm wants to produce 25% more output, it…

A: In a market, economies of scale refers to the situation when a firm is experiencing an inverse…

Q: Distinguish between short-run and long-run production decisions and illustrate their impact on costs…

A: Average cost is total cost divided by total production while marginal cost is the change in total…

Q: Consider the following types of firms. For each one, the long-run average cost curve eventually…

A: Diseconomies of scale occur when a corporation or business expands to the point where its costs per…

Q: Consider the following total cost function: where represents output and are constants. What can we…

A: Answer: (b) The firm experiences falling average fixed costs, but rising average variable costs.

Q: Distinguish between economies of scale and diseconomies of scale. Give examples of why a firm may…

A: The long-run average total cost curve declines because apparently, the firm becomes efficient in…

Q: The shape of a firm’s long-run average cost curve depends on how costs vary with the scale of…

A: There are 2 types of cost will occur by any enterprises, 1. Fixed Cost. 2. Variable cost. Fixed will…

Q: A student has just written on an exam that, in the long run, fixed cost will make the average total…

A: Long run: Long run refers to the time period that necessary to increase the production capacity or…

Q: Firms are facing a lot of challenges when dealing with their costs of production. Analyze a fixed…

A: Fixed cost refers to the cost of production that the firm has to incur irrespective of output. This…

Q: A firm with some fixed costs and a constant marginal cost at all levels of production will have…

A: The total cost can be divided into two parts: total fixed cost and total variable cost. Total fixed…

Q: The average variable cost curve and the average total cost curve get closer to each other as output…

A: The average variable cost refers to the variable cost per unit. The average total cost is the…