The following graph of long-run changes in Price ($) 10 9 8 7 6 5 4 3 2 1 0 0 Constant returns to scale 1 2 O External diseconomies of scale ONeither economies nor diseconomies of scale O The law of increasing marginal returns O Internal economies of scale of the firms 3 O Internal diseconomies of scale of the firms 4 a competitive market indicate that it is exhibiting 5 D₁ 6 51 52 53 7 8 D₂ 9 D3 10 Quantity
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- Cost LRAC 40 30 20 10 100 200 400 800 Output b. What happened to the cost of one good as the firm increased its output from 100 units to 200 units and from 200 units to 400 units? c. What is the firm experiencing as it increased it scale of operation from 100 units to 400 units? d. What is the firm experiencing if it chooses to produce at point P? Give reason for your answer. e. Which point would be the best point for the firm to produce at? Give reason for your answer.Refer to the to graph on the night Which level of output in the graph below represents the minimum efficent scale? OA 1,000 books B. 20.000 books C. 40,000 books $22.00 20.00 18.00 D. 80,000 boks Which sire bookstore is more likely to expenence diseconomies of scale? Long -nun Average cost OA Abookstore seling 1,000 books per month B. Abookstore seling 20,000 books per month OC. Abookstore selling 40,000 books per month 1,.000 20.000 Quantity of books sold per month OD. A bookstore selling 80.000 books per month 40,00,000IAN GE Student Resources - Faculty Resources - Academic Resources - Ime grupiI Delow IIUIUUES two piunt Sizes us musuuteu uy ACr UnU ACZ. AC1 AC2 AC1 AC2 LRAC Q1 02 Output per time period Refer to the graph above to answer this question. Which of the following statements is correct if a firm is operating at point a on AC1? Select one: O a. The firm is achieving MES. O b. Building a larger plant would result in lower long-run average cost. O c. Building a larger plant would not result in lower long-run average cost. od. The firm has achieved capacity output. O e. An increase in the output would not lower costs. Clear my choice Staut o gao
- Refer to the to graph on the right. Which level of output in the graph below represents the minimum efficient scale? OA 1,000 books B. 20,000 books C. 40,000 books $22 00 D. 80,000 books 20.00 18.00 Which size bookstore is more likely to expenence diseconomies of scale? Long-nun Average cost O A. Abookstore selling 1.000 books per month B. A bookstore seling 20,000 books per month C. Abockstore selling 40,000 books per month 40,00.000 OD. A bookstore seling 80 000 books per month 1,000 20,000 Quantry of books sold per monthSee Hint Suppose you are the owner of a firm producing jelly beans. Your production costs are shown in the table. Jelly Bean Production Вохes Average cost per box 100 $0.95 101 $0.96 102 $0.97 $0.98 103 Initially, you produce 100 boxes of jelly beans per time period. Thena new customer calls and places an additional order for jelly beans, requiring you to increase your output to 101 boxes. She offers you $1.75 for the additional box. Should you produce it? Choose one: O. A Yes, because $1.75 is greater than average total cost, O B. No, because $1.75 is less than average total cost. O C. Yes, because $1.75 is greater than the marginal cost. O D. No, because $1.75 is less than the marginal cost. 9 E. We can't say because we don't know average variable cost.Microeconomics Q193515 Deadline passed If the price (P) of maple syrup is $4.00 per can, average cost (AC) is $4.50 per can and average variable cost (AVC) is $3.00 per can, then to maximize profit or minimize loss the firm should: Answer approved2$1 Will be moved to archive within about 9 hours. Microeconomics Q194159 4 hours 26 min 1. Briefly discuss two major differences between the theory of perfect competition and the theory of monopoly. 2. What reasons make the demand curve of a perfectly competitive firm completely horizontal? Only state. 3. Represent the information below in an appropriately labelled diagram with the relevant curves, and decide whether the firm should continue production or shut down in the short run, using calculations. A perfectly competitive firm produces 100 mugs to maximize its profit. The average total cost (ATC) is 13 taka per mug and the average fixed cost (AFC) is 4 taka per mug when the firm produces 100 mugs. The…
- The table shows three short-run cost schedules for three plants of different sizes that a firm might build in the long run. Plant 1 Plant 2 Plant 3 Output ATC Output ATC Output ATC 10 $ 10 10 $ 15 10 $ 20 20 9 20 10 20 15 30 8 30 7 30 10 40 9 40 10 40 8 50 10 50 14 50 9 What is the long-run average cost of producing 20 units of output? Multiple Choice $15 О $10 ○ $34 О $9Vinnie’s Painting Company specializes in painting houses. Their cost schedule is as follows: 1. Show to calculate for the table below Output TFC TVC TC AFC AVC ATC MC 0 1000 1 100 2 100 3 400 4 450 5 1600 6 3200 7 6400 a) Given the partial data available, finish the table and calculate all the costs. b) What is the minimum efficient scale of Vinnie’s company? c) What is the marginal cost of 6 houses? d) If Vinnie charges $825 per house, how many houses he should paint to maximize profits?The table shows three short-run cost schedules for three plants of different sizes that a firm might build in the long run. Plant 1 Plant 2 Plant 3 Output ATC Output ATC Output ATC 10 $ 10 10 $ 15 10 $ 20 20 9 20 10 20 15 30 8 30 7 30 10 40 9 40 10 40 8 50 10 50 14 50 9 What is the long-run average cost of producing 10 units of output? Multiple Choice $10 $15 $20 $45
- Refer to the graph shown. If a firm expected to produce 900 units when it built its plant but now desires to reduce its output to 600 units in the short run, it will use the plant size represented by: 0 300 O Multiple Choice O 600 00 SATC₁ Quantity SATC₁. SATC2. SATC3 SATC2 SATC3 SATC₂ SATCA. 900 L 1200 SATC Long-Run Average Cost 1500 Refer to the graph shown. A firm that shifts from SATC₁ to SATC2 is most likely to do so because planned output increases: Cost per unit 0 300 600 SATC₁ Multiple Choice 900 1200 1500 Quantity SATC₂ SATC2 SATC₂ to 300, from 300 to 900. from 300 to 600. SATC Long-Run Average Cost from 600 to 900.How do transportation costs affect attaining economiesof scale in brewing? How might a large beer producerdecide on the optimal number of breweries to operate?A textile firm in a competitive industry employs a particularly efficient manager torun the operations at its production facility. In the textile industry, a plant managertypically makes a salary of $4,500 per month. The textile firm employing thesuperior manager faces the LAC and LMC curves shown in the figure below. Inlong-run competitive equilibrium, the price of the product is $9 A- typical textile firm in this competitive industry has a minimum long-runaverage cost of $______. The typical textile firm earns economic profit of$______ B-The textile firm with the superior plant manager could earn economic profitof $___________ per month, if no rent is paid to the superior manager C-The superior plant manager is likely to earn a salary of $______ per month,$____________ of which is economic rent