HOW DISCUSS THE ECONOMIC CONCEPT OF THE LONG RUN AVERAGE COST
CURVE AND HOW IT CAN BE USED TO EXPLAIN RETURN TO SCALE. ONE NEEDS
TO TAKE INTO ACCOUNT THE FACTORS THAT RESULT IN RETURN TO
SCALE..
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...
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?
Draw a long run average cost curve, as well as several short run
average cost curves if the firm has increasing economies of scale
followed by decreasing economies of scale.
In the long run, all costs are variable. Diagram and explain the
long-run average cost curve and what it means to have (i) economies
of scale, (ii) diseconomies of scale, and (iii) constants costs.
What factors contribute to these economies and diseconomies?
Draw a long-run average cost curve, carefully explain how it is
derived, and explain why it has the shape that it has.
Please show me your thought process. Please explain it as if you
are telling it to someone who has no clue about economics.
What are three possible scenarios for “returns to scale” in long
run production? How do the average productivity patterns in each
phase of these returns-to-scale scenarios influence the long run
average total cost of production as the firm’s output increases?
Why?
What is the long run average cost (LRAC) of a firm? How would
you obtain the LRAC curve from the short run average cost (SRAC)
curves? Illustrate your answer by using appropriate diagrams and
underlying assumptions.