Why do we assume that a firm will produce its output using the lowest-cost combination of...

Why do we assume that a firm will produce its output using the lowest-cost combination of inputs? Is this also true for the U.S. Postal Service and for the American Red Cross?

Expert Solution

Rahul Sunny answered 2 years ago

- A curve showing the lowest cost at which a firm is able to produce a...

- A curve showing the lowest cost at which a firm is able to produce a given level of output in the long run is a) a long-run average total cost curve. b) a minimum efficient scale curve. c) a long-run production function. d) a long-run marginal cost curve. - The slope of an isocost line determines the marginal rate of substitution. a) True b) False - The slope of an isoquant is equal to the ratio of the price...

Calculate the lowest USD cost to pay 100,000UKP of payables in 180 days. Assume the firm...

Calculate the lowest USD cost to pay 100,000UKP of payables in 180 days. Assume the firm has no excess cash. The current spot rate of the UKP is USD 2.01per UKP, and the 180 day forward rate is USD 2.00 per UKP. The USD interest rate is 5% for borrowing, and the UKP interest rate is 4% for deposits. Both of these rate are for 180 days. What is the lowest USD cost to pay the UKP payable?

2. A firm is required to produce 234 of output using quantities of labor and capital...

2. A firm is required to produce 234 of output using quantities of labor and capital (L, K) = (21, 6) . For each of the following production functions, state whether it is possible to produce the required output with the given input combination. If it is possible, state whether producing Q = 234 with input combination is technically efficient or inefficient. (a) Q = 8L + 7K (b) Q=3KL+L-4 (c) Q=9√KL (d) Q= min{2L, 25K}

Why would a firm decide to produce a positive quantity of a output even though it...

Why would a firm decide to produce a positive quantity of a output even though it makes negative profits by doing so? A. Because the price is high enough to cover the average fixed cost. B. Because the price is high enough to cover the average total cost. C. Because the price is high enough to cover the average variable cost. D. A firm would never produce when profit is negative.

A firm has a possibility to produce output using either one or two units of capital....

A firm has a possibility to produce output using either one or two units of capital. Capital costs $10 per unit. Labor is always variable. If it uses 1 unit of capital, marginal cost is constant (no diminishing returns) at $3. If it uses 2 units of capital, marginal cost is constant at $1. For the output quantities of 1 to 10, create the firm’s short run average total cost curves. Also create the firm’s long-run average total cost curve....

If the firm was regulated to produce at the socially optimal output

If the firm was regulated to produce at the socially optimal output ( producer’s surplus is at its maximum), how much would the firm produce?

Why do we need to produce sperm and eggs (gametes)?

Why do we need to produce sperm and eggs (gametes)?Explain why all sexually reproducing organisms need both haploid and diploid cells.

Using a diagram explain the price and output behaviour of a monopoly firm and why it...

Using a diagram explain the price and output behaviour of a monopoly firm and why it is argued that such monopoly behaviour is inefficient. Word limit - 160 words

Do oligopolies produce an eﬃcient level of output?

Why do we model a competitive firm with assumptions that seem to be unrealistic? Why do...

Why do we model a competitive firm with assumptions that seem to be unrealistic? Why do we see that marginal cost tends to increase with each unit of output? Why do we observe a U-shaped Average Cost Curve? Why is it the Marginal Revenue equal to the Price? What does it mean that the Marginal Revenue curve is a flat horizontal curve? Why do we assume that companies are profit-maximizing institutions? After all, they may care about something else besides...

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