1. What are economies of scale? How do economies and
diseconomies of scale influence the shape of the long run cost
curves? How do economies of scale relate to indivisible setup
costs? What are diseconomies of scale and how do they arise?
1.Explain what is meant by economies of scale and economies of
scope.
2. Give two examples of what would cause the short-run average
total cost to shift up. Give two examples of what would cause the
short-run average total cost to shift down. Draw both
scenarios.
Describe and define the economies and diseconomies of scale for
both companies in relation to the resources they use in their
factors of production (Land, Labor, Entrepreneurial Talent, &
Capital).
What types of Externalities to both firms face? How are they
alike? How are they different?
3. Provide two examples of price discrimination that the firms
above engage in and how that specific action would help the firms
sales.