Question

In: Economics

5. Explain why Marginal Cost will initially decline and then increases as the number of products...

5. Explain why Marginal Cost will initially decline and then increases as the number of products produced increases.

6. Explain why Average Total Cost will initially decline and then increases as the number of products produced increases.

7. Explain why Average Fixed Cost only declines as the number of products increases.

8. Explain how Long-Run Average Total Cost is determined

9. Provide reasons why Long-Run Average Total Cost would decline, stay constant, and increase.

10. Give at least 2 reason why a firm would achieve Economy to Scale.

Solutions

Expert Solution

Summary:

(5) Due to Law of diminishing returns and economies of scale

(6) Due to Law of variable proportions

(7) Because fixed costs are constant

(8) LAC curve is the envelope of SAC curves

(9) Due to returns to scale

(10) Due to managerial improvements and technological advancements


Related Solutions

Why do transportation costs initially decrease as the number of warehouses in a system increases?
Why do transportation costs initially decrease as the number of warehouses in a system increases?
Explain why the marginal cost of production must increased if the marginal product of the marginal...
Explain why the marginal cost of production must increased if the marginal product of the marginal resource is decreasing.
Define marginal productivity and explain the three reasons why marginal productivity declnes as output increases. Define...
Define marginal productivity and explain the three reasons why marginal productivity declnes as output increases. Define short run marginal cost and explain why,using marginal productivity,that marginal cost increase as output increase(saying if one goes up the other goes down or writing an equation is Not and expalination and why) Describe returns to scale ,and how it deffers from marginal productivity despite that both address increase in output. Given that output is going to increase ,explain how a firm would increase...
5. Which of the following statements is true? A) When the marginal product increases, the marginal...
5. Which of the following statements is true? A) When the marginal product increases, the marginal cost decreases. why? B) The marginal product of an input increases as more and more inputs are used. C) The marginal cost curve intersects the average fixed cost curve at its minimum. D) When the marginal cost curve lies above the average cost curve, the marginal cost curve slopes upward, while the average cost curve slopes downward. 6. Which of the following statements is...
Diagram the “cost template” for the firm and explain precisely how and why the marginal cost...
Diagram the “cost template” for the firm and explain precisely how and why the marginal cost curve relates to the average cost curves at any output level. Please show me your thought process. Please explain it as if you are telling it to someone who has no clue about economics.
Describe the behavior of the marginal utilities of such products. Does this explain why many people...
Describe the behavior of the marginal utilities of such products. Does this explain why many people choose not to smoke, but those who do usually consume ten or more cigarettes per day?
Describe the behavior of the marginal utilities of such products. Does this explain why many people...
Describe the behavior of the marginal utilities of such products. Does this explain why many people choose not to smoke, but those who do usually consume ten or more cigarettes per day?
a. Explain why the marginal cost curve intersects the average total and variable cost curves at...
a. Explain why the marginal cost curve intersects the average total and variable cost curves at their respective minimum values: b. At what point on the ATC will a perfectly competitive firm always produce in the long run: c. The supply curve for a perfectly competitive firm is the same as one of the cost curves based on a specific criterion, state both the curve and the criterion.
(a) Explain why the marginal cost curve above the average variables cost curve is referred to...
(a) Explain why the marginal cost curve above the average variables cost curve is referred to as the firm’s short run supply curve? ( use both verbal and diagram analysis)
1.Explain why economists advocate that regulators use marginal-cost and not average-cost pricing. Also explain why regulators...
1.Explain why economists advocate that regulators use marginal-cost and not average-cost pricing. Also explain why regulators favor average cost pricing. 2. Provide the formula for how a Public Utility Commission determines the rate-of-return. Then relate it to the Averch-Johnson Effect. 3. Draw a graph that shows the social welfare loss from a flat rate as compared to using a peak and off-peak rate. Explain. 4. Why is it a challenge to utilities to promote energy efficiency? How might decoupling reduce...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT