Question
In: Economics
Explain why a firm's long-run total cost is no greater than its short-run total cost. Under...
Explain why a firm's long-run total cost is no greater than its short-run total cost. Under what circumstances will the two be equal? Illustrate both types of total cost in a diagram.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
1 The short-run average total cost curve and the long-run average total cost curve are similarly...
1
The short-run average total cost curve and the long-run average
total cost curve are similarly shaped. What are the causes for the
short run and long-run average total cost curve to slope down and
up?
2 Mr. Salim has been working at a car manufacturing plant
forthe last 4 years. He recently lost his job due to the downsizing
of the company he works for due topoor car sales and poor economic
performance. What type of unemployment is Salim...
Long Run Cost Derive a firm's total cost curve by using a firms isoquants and isocost...
Long Run Cost
Derive a firm's total cost curve by using a firms isoquants and
isocost lines(note:be sure to show what is on the axis,and the
values for all points and curves-the correct labeling and spacing
of the things is very mportant)for the case where the firm has
a)constant return to scale
b)decreasing return to scale
c)increasing returns to scale
d)For decreasing return to scale ,from the total cost
curve,derive the correct long run marginal cost curve and long run...
In a price-taker market, each firm's short run supply curve is its marginal cost curve, above its minimum average total cost.
7) T/F In a price-taker market, each firm's short run supply
curve is its marginal cost curve, above its minimum average total
cost.8) T/F The limited liability of stockholders in the corporate
business structure makes it harder to raise equity capital.9) T/F In the year 2008, nearly three out of four business firms
in the United States were organized as proprietorships.10) T/F When demand is relatively price inelastic, price and
total revenue will change in the same direction.11) T/F As...
Suppose a perfectly competitive firm's short-run total cost (TC) is given by TC = 200...
Suppose a perfectly competitive firm's short-run total cost (TC)
is given by
TC = 200 + 4Q +
2Q2 where Q = output and 200 = fixed cost. As a result,
MC = 4 + 4Q.
Suppose the price of the firm's price is $24.
a.
How much should the firm produce in the short run to maximize
its profits?
b.
How large will the firm's short-run profits be? Remember Profit
= TR – TC.
c.
Should the...
Graph and explain in detail the short-run and long-run equilibria under a monopolistic competition situation.
Graph and explain in detail the short-run and long-run
equilibria under a monopolistic competition situation.
How can the long-run average cost (LRAC) curve be derived from the short-run average total cost...
How can the long-run average cost (LRAC) curve be derived from
the short-run average total cost (SRATC) curve?
How can the long-run average cost (LRAC) curve be derived from the short-run average total cost...
How can the long-run average cost (LRAC) curve be derived from
the short-run average total cost (SRATC) curve?
Describe economies of scale and diseconomies of scale.
What are the determinants of economies of scale and
diseconomies of scale, respectively?
Using a real-world company (other than Sysco), explain the
causes of economies of scale for your company.
How would economies of scale help your company compete in its
industry?
Consider a perfectly competitive market in which each firm's short-run total cost function is C =...
Consider a perfectly competitive market in which each firm's
short-run total cost function is C = 64 + 6q + q2,
where q is the number of units of output produced.
The associated marginal cost curve is MC = 6+ 2q.
In the short run each firm is willing to supply a positive
amount of output at any price above ___.
If the market price is $30 each firm will produce ____ units in
the short-run.
Each firm earns a...
Let a perfectly competitive firm's short-run total cost function be; C(p) = 100q - 4q2 +...
Let a perfectly competitive firm's short-run total cost function
be;
C(p) = 100q - 4q2 + 0.2q3 +
450
a) Find the Marginal Cost (MC), Variable Cost (VC) and Average
Variable Cost (AVC)?
b) Suppose the Market Price is P = $100, what would be
the profit-maximizing quantity?
c) Now suppose Average Total Cost (ATC) = $116 at the
profit-maximizing quantity. Is this firm making a loss, profit or
breakeven?
d) Should the firm shut down or continue to produce?...
Why is the short run supply curve relatively more inelastic than the long run supply curve?
Why is the short run supply curve relatively more inelastic than
the long run supply curve?
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