Homework Answers
AC = a + b
(As r = 0, Nr = N0 = 1. So, AC = a + b)
does not experience
negative
(When there is no r then there is no learning by doing and AC must
fall for this so r should be negative.)
C. decreases with cumulative output
(When r < 0 then AC will become AC = a + b/Nr. So, as
N increases AC will decrease.)
C. a is the average cost of producing before any learning by
doing
(AC = a when there is no learning by doing.)
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A firm's learning curve, which shows the relationship between average cost and cumulative output (the sum...
#11 11. A firm's average cost of production can fall over time if the firm "learns"...
#11
11. A firm's average cost of production can fall over time if the firm "learns" how to produce more effectively. The learning curve shows how much the input needed to produce a given output falls as the cumulative out- put of the firm increases. 1 C functie wat het of noduction to the
The graph shows a firm's average total cost (ATC) and marginal cost (MC) curves. At what...
The graph shows a firm's average total cost (ATC) and marginal cost (MC) curves. At what output level does the firm have economies of scale? 12 11 10 MC ATC 9 8 Price $/Q 4 3 N 14 16 15 0 12 13 10 9 8 7 6 4 5 3 2 0 Quantity Quantit OQ > 4 OQ < 4 OQ> 8 OQ < 8
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The...
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The marginal cost curve is given by MC 0.+0.1Q. (a) Find the minimum efficient scale for the above cost function (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P 13.1-0.040. What is the market quantity? How many firms are there? (d) Suppose demand increases to P...
Suppose a firm's average total cost curve is decreasing with output. What can be said of...
Suppose a firm's average total cost curve is decreasing with output. What can be said of its marginal cost curve? The firm's marginal cost curve must be A. intersecting the average total cost curve. B. increasing with output. C. below the average total cost curve. D. decreasing with output. E. horizontal.
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine sug...
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine suggests that: MC shifts upward as current output increases b. an increase in this period's output long-run average cost curve to increase at a smaller output d the Law of Diminishing Returns to be violated e, none of the above 13. If given quantities of soap and sham be produced separately then: both production processes must be characterized by economies of scale...
e) Suppose that a competitive firm's marginal cost of producing output q is given by MC(q)...
e) Suppose that a competitive firm's marginal cost of producing output q is given by MC(q) -3+2q. Assume that the market price of the firm's product is $9. i) What level of output will the firm produce? (2p) ii) What is the firm's producer surplus? (4p) ii) Suppose that the average variable cost of the firm is given by AVC(g)-3+q. Suppose that the firm's fixed costs are known to be $3. Will the firm be earning a positive, negative, or...
If a firm's long-run average cost goes from $3 to $2.5 when output increases, the firm...
If a firm's long-run average cost goes from $3 to $2.5 when output increases, the firm is experiencing ________. economies of scale constant returns to scale diseconomies of scale a shift in its long-run average cost curve
Suppose each firm's long run average cost curve, for positive levels of output, is given by AC = 0.1 + 0.05Q + 5/Q....
Suppose each firm's long run average cost curve, for positive levels of output, is given by AC = 0.1 + 0.05Q + 5/Q. The marginal cost curve is given by MC = 0.1 + 0.1Q. (a) Find the minimum efficient scale for the above cost function. (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P = 13.1-0.04Q. What is the market quantity? How many firms...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of output. b. is always equal to or greater than short-run average total cost. c. can be measured in the short-run. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then a long-run marginal cost is at its minimum point b. long run average cost is at its minimum point. c long...
At 15 units of output, a firm's marginal cost and average total cost each equal $75....
At 15 units of output, a firm's marginal cost and average total cost each equal $75. Therefore, assuming 'typically' shaped cost curves, at 16 units of output: Its marginal cost is greater than $75 and its average total cost is less than $75. O Its marginal cost is less than $75 and its average total cost is greater than $75. O Its marginal cost and average total cost are each less than $75. 0 Its marginal cost and average total...
#11
11. A firm's average cost of production can fall over time if the firm "learns" how to produce more effectively. The learning curve shows how much the input needed to produce a given output falls as the cumulative out- put of the firm increases. 1 C functie wat het of noduction to the
The graph shows a firm's average total cost (ATC) and marginal cost (MC) curves. At what output level does the firm have economies of scale? 12 11 10 MC ATC 9 8 Price $/Q 4 3 N 14 16 15 0 12 13 10 9 8 7 6 4 5 3 2 0 Quantity Quantit OQ > 4 OQ < 4 OQ> 8 OQ < 8
4) Suppose each firm's long run average cost curve, for positive levels of output, is given by AC 0.10.05Q+5/Q. The marginal cost curve is given by MC 0.+0.1Q. (a) Find the minimum efficient scale for the above cost function (b) What is the firm's minimum average cost? (c) Suppose you have many identical firms in a long run competitive equilibrium. Demand is P 13.1-0.040. What is the market quantity? How many firms are there? (d) Suppose demand increases to P...
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine suggests that: MC shifts upward as current output increases b. an increase in this period's output long-run average cost curve to increase at a smaller output d the Law of Diminishing Returns to be violated e, none of the above 13. If given quantities of soap and sham be produced separately then: both production processes must be characterized by economies of scale...
e) Suppose that a competitive firm's marginal cost of producing output q is given by MC(q) -3+2q. Assume that the market price of the firm's product is $9. i) What level of output will the firm produce? (2p) ii) What is the firm's producer surplus? (4p) ii) Suppose that the average variable cost of the firm is given by AVC(g)-3+q. Suppose that the firm's fixed costs are known to be $3. Will the firm be earning a positive, negative, or...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of output. b. is always equal to or greater than short-run average total cost. c. can be measured in the short-run. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then a long-run marginal cost is at its minimum point b. long run average cost is at its minimum point. c long...
At 15 units of output, a firm's marginal cost and average total cost each equal $75. Therefore, assuming 'typically' shaped cost curves, at 16 units of output: Its marginal cost is greater than $75 and its average total cost is less than $75. O Its marginal cost is less than $75 and its average total cost is greater than $75. O Its marginal cost and average total cost are each less than $75. 0 Its marginal cost and average total...
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