Microeconomics. Prove the following: 1. Consider a firm that has fixed costs. Its marginal cost curve...
Microeconomics. Prove the following:
1. Consider a firm that has fixed costs. Its marginal cost curve must pass through the lowest point on the average cost curve. Also, it must pass through the lowest point on the average variable cost curve.
2. If input prices for a firm are doubled, then the cost function must double for all levels of output.
3. Consider a firm that has fixed cost F. This firm will not change its output decision regardless of a change in F in the short run.
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Microeconomics. Prove the following:
1. Consider a firm that has fixed costs. Its marginal cost curve...
If a firm has a U-Shaped long-run average cost curve, a
If a firm has a U-Shaped long-run average cost curve, a.) its fixed cost rises as output rises. b.) it must have increasing returns to scale at low levels or production and decreasing returns to scale at high levels of production. C.) it must have increasing returns to each input at low levels of production and decreasing returns to each input at high levels of production. D.) the firm can maximize its output by operating at the point of minimum...
**Only [Harder] Question** Problem 2. Consider a firm that has a cost function of c(y) =...
**Only [Harder] Question** Problem 2. Consider a firm that has a cost function of c(y) = 5y 2 + 50, 000. In other words, this is a firm with a fixed cost of $50,000 (which might be something like the cost of rent on the firm’s building, which they have to pay whether they produce any output or not) and a variable cost of $5Y 2 , (which we’ll think of as the cost of the labor and machinery necessary...
Assume a perfectly competitive firm has positive fixed costs and marginal costs that initially fall and...
Assume a perfectly competitive firm has positive fixed costs and marginal costs that initially fall and then rise. Draw a diagram showing this firm’s marginal cost, average variable cost, and average total cost. (Hint: Pay careful attention to where the marginal cost curve intersects the others). Identify the minimum price the firm must receive before it shuts down, and the minimum price before it exits in the long run. Now, show what would happen if this firm experienced an increase...
When a firm has a natural monopoly, the firm's a. marginal cost curve must lie...
When a firm has a natural monopoly, the firm's a. marginal cost curve must lie above the firm’s average total cost curve. b. marginal cost always exceeds its average total cost. c. average total cost curve is downward sloping. d. total cost curve is horizontal.
A firm has the cost function That is, it has a fixed production capacity i, below which marginal ...
A firm has the cost function That is, it has a fixed production capacity i, below which marginal cost is constant, at e (a) Sketch the firm's marginal- and average-cost function. (b) Solve for its profit-maximizing output if it sells in a perfectly competitive market. (e) Describe the solution possibilities for output if the firm is a profit- maximizing monopoly with linear demand (d) Identify the "shadow price of capacity in each of cases (b) and (c).
A firm has...
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes pro...
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32 If marginal cost is rising average variable cost must be falling average fixed cost must be rising marginal product must be falling marginal product must be rising QUESTION 33 Diminishing marginal product suggests that additional units of output beccome less costly as more output is produced marginal cost is upward sloping...
For any firm, what is the long-run average cost curve? O A A downward sloping line...
For any firm, what is the long-run average cost curve? O A A downward sloping line o B Afunction which shows the lowest average cost of producing any output level 10 c The same as the long-run marginal cost curve O D Upward sloping at all levels of output
Suppose a firm is a monopoly. Its marginal cost curve is flat, and its average cost...
Suppose a firm is a monopoly. Its marginal cost curve is flat,
and its average cost curve is downward sloping (because it has a
fixed cost).
1.) Using the point drawing
tool,
indicate the monopoly's profit-maximizing price and quantity in
the figure if it cannot price discriminate. Label this point
'e 1e1.'
2.) Using the rectangle drawing
tool,
indicate the monopoly's losses at the no price discrimination
profit-maximizing price and quantity. Label this rectangle
'Losses 1Losses1.'
3.) Using the point...
Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve.
3. Is monopolistic competition efficient? Suppose that a firm produces baseball bats in a monopolistically competitive market. The following graph shows its demand curve, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. Place a black point (plus symbol) on the graph to indicate the long-run monopolistically competitive equilibrium price and quantity for this firm. Next, place a grey point (star symbol) to indicate the minimum average total cost the firm faces and the quantity associated with...
1. Toys Create Corp., produce puzzles and sell to consumers. A worker costs MYR 100 a day, and the firm has fixed costs of MYR 200. Workers Output Marginal Product Total Cost Average Total Cost Marginal Cost 0 0 --- --- --- 1 20
1. Toys Create Corp., produce puzzles and sell to consumers. A worker costs MYR 100 a day, and the firm has fixed costs of MYR 200. WorkersOutputMarginal ProductTotal CostAverage Total CostMarginal Cost00---------1202503904120514061507155a. Using the information above, calculate the marginal product, total cost, average total cost, and marginal cost. Identify the output level at minimum average total cost for Toys Create Corp. b. Construct the marginal-cost and average-total-cost curves for Toys Create Corp. Using your own words, explain diminishing marginal product and...
A firm has the cost function That is, it has a fixed production capacity i, below which marginal cost is constant, at e (a) Sketch the firm's marginal- and average-cost function. (b) Solve for its profit-maximizing output if it sells in a perfectly competitive market. (e) Describe the solution possibilities for output if the firm is a profit- maximizing monopoly with linear demand (d) Identify the "shadow price of capacity in each of cases (b) and (c).
A firm has...
QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product maximizes profit minimizes average total cost minimizes average variable cost QUESTION 32 If marginal cost is rising average variable cost must be falling average fixed cost must be rising marginal product must be falling marginal product must be rising QUESTION 33 Diminishing marginal product suggests that additional units of output beccome less costly as more output is produced marginal cost is upward sloping...
For any firm, what is the long-run average cost curve? O A A downward sloping line o B Afunction which shows the lowest average cost of producing any output level 10 c The same as the long-run marginal cost curve O D Upward sloping at all levels of output
Suppose a firm is a monopoly. Its marginal cost curve is flat,
and its average cost curve is downward sloping (because it has a
fixed cost).
1.) Using the point drawing
tool,
indicate the monopoly's profit-maximizing price and quantity in
the figure if it cannot price discriminate. Label this point
'e 1e1.'
2.) Using the rectangle drawing
tool,
indicate the monopoly's losses at the no price discrimination
profit-maximizing price and quantity. Label this rectangle
'Losses 1Losses1.'
3.) Using the point...
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