Question

A19. When all of a firm's inputs are doubled, input prices do not change, and this results in the firm's level of production more than doubling, a firm is operating:

1. (A) on the upward-sloping portion of its long-run average total cost curve.

2. (B) on the downward-sloping portion of its long-run average total cost curve.

3. (C) at the minimum of its long-run average total cost curve.

4. (D) on the upward-sloping portion of its marginal cost curve.

5. (E) on the stretch of the horizontal segment of its marginal cost curve. Answer:B

   A22. For a firm producing at any level of output LOWER than the most profitable one, an increase in output adds:

6. (A) more to total cost than to total revenue.

7. (B) more to total revenue than to total cost.

8. (C) the same amount to total revenue as to total cost.

9. (D) to total revenue but not to total cost.

10. (E) to total cost but not to total revenue. Answer: B Hope to receive a detailed explanation, thank you!

Answer 1

19.When a doubling of inputs results in a more than proportionate change in output,prices being the same,then the firm is experiencing increasing returns to scale.It is represented by downward sloping LRATC.

Answer-B.

20.When the firm is producing a level of output less than the profit maximizing level of output,then an increase in output adds more to increase in TR than increase win TC.

Answer-B