6.Determine whether the scenarios below lead to economies, diseconomies of scale or neither:A. NeitherB. Diseconomies of ScaleC. Economies of Scale1. Greater use of specialization and division of labor2. Added bureaucracy3. Higher demand for the product The table below gives the long run cost data for producing computers. Find the long run average total cost of producing each unit, then determine if there are Economies of Scale, Constant Returns to Scale or Diseconomies of Scale at selectquantities.Which describes our situation when quantity increases from 2 to 3?OEconomies of ScaleODiseconomies of ScaleOConstant Returns to ScaleWhat about when quantity increases from 3 to 4?OEconomies of ScaleODiseconomies of ScaleOConstant Returns to ScaleQuantity Long run Total Cost in $ Long run Avg Total Cost in $081234528476796< Previous138

Quantity Long run T.C $ L.R A.T.C $ 0 8 -- 1 28 28 2 47 23.5 3 67 22.33 4 96 24 5 138…

Which describes our situation when quantity increases from 2 to 3 Economies of Scale ODiseconomies of Scale Constant Returns to Scale What about when quantity increases from 3 to 4? Economies of Scale ODiseconomies of Scale OConstant Returns to Scale

Which describes our situation when quantity increases from 2 to 3 Economies of Scale ODiseconomies of Scale Constant Returns to Scale What about when quantity increases from 3 to 4? Economies of Scale ODiseconomies of Scale OConstant Returns to Scale

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 20P

See similar textbooks

Related questions

Q: Let’s see just how much high expected inflation can hurt incentives to save for the long run. Let’s…

A: The difference between the real interest rate and the nominal interest rate is that the real…

Q: Ahlam grows carrots in her garden for home consumption. This activity is: a. Excluded from GDP…

A: GDP stands for gross domestic product. GDP measures the market value of final goods and services…

Q: 9a Briefly explain what the present value of a health care and prevention

A: The health care sector is distinguished by persistent reforms with the goal of the efficient…

Q: With a voluntary export restraint (VER), the economic rent created by the quantitative limit on…

A: An exporting country's ability to export a certain amount of a good to another country is restricted…

Q: Consider an economy that is characterized by the following equations= C= 400 + 05 Yd I = 700 - 4000i…

A: The equilibrium is established where the good market and money market are equal. or IS=LM.

Q: You borrow $800 from a family member and agree to pay it back in nir months. Because you are part of…

A: Simple interest is denoted as the procedure for solving the interest amount for a given principal…

Q: 54

A: An economic model is one which tries to establish a relationship between variables (independent) and…

Q: An average variable cost function is estimated as AVC = 96-2Q + 0.05Q2. Which of the following cost…

A: When talking about cost functions of a firm, it can be said that these coste function are…

Q: Q4: A project is considered to last for 10 weeks with a budget of $1,600,000. The cost behaviour of…

A: Cumulative cost variance considers the whole venture financial plan versus cost up a particular…

Q: In 2019, there were approximately 163 million people in the labor force and the unemployment rate w…

A: The labor force is the amount of employed and jobless people. The workforce/labor force…

Q: An economy produces two goods: hot dogs and burgers. In 2014, 15 hot dogs are produced at a price…

Q: The following table contains nominal and real GDP data, in billions of dollars, from the U.S. Bureau…

A: [GDP deflator = Nominal GDPReal GDPx100] [Percent Increase in Price Level (INFLATION) = GDP…

Q: 6. A-One bakery in Brampton sells 350 fruit cakes slices each month for $3.25 each. They are looking…

A: Given information: The bakery sells 350 fruit cake slices each month for $3.25 each. A survey…

Q: The financial crisis of 2007 through 2010 was not limited to the United States. The ABCPs and CDOs…

A: Deleveraging is the point at which an organization or individual endeavors to diminish its all out…

Q: What is GDP (50 words only)

A: The Gross Domestic Product is the summation of the money value of all the final goods and services…

Q: Bureau of Economic Analysis Table 1.1.6. Real Gross Domestic Product, Chained Dollars [Billions of…

A: Gross Domestic Product Gross Domestic Product refers to the money value of all the commodities and…

Q: An economy produces two goods: tomatoes and ketchup. It is assumed that half of the tomatoes are…

A: Given information: Price of tomatoes in 2014 = $2 Price of Ketchup in 2014 = $7 Price of tomatoes in…

Q: Find Indirect utility function of the following function U= max (X, Y) subject to the budget…

A: Maximize U = Max(X,Y) Subject to Px*X + Py*Y ≤M This is the problem with cornor solution, here at…

Q: assume your price is equal to marginal cost and marginal cost slopes upwards. in the short

A: Perfect competition is a market in which there are a large number of buyers and sellers, all of whom…

Q: Suppose that there is limited commitment in the credit market, but lenders are uncertain about the…

A: Collateral constraints drive an unevenness in the connection between house costs and economic…

Q: Which of the following transactions would be included in GDP? a. Abeer buys a newly constructed…

A: When talking about gross domestic product, it can be said that it is the income measurement tool for…

Q: 3

A: In economics, when the choices are known, then there is an element of certainty attached to it. But…

Q: Consider a demand-determined model, with a marginal propensity to consume of 0.80, a marginal…

A: Aggregate demand refers to the total purchase during the year . It is the sum of consumption ,…

Q: Economic surplus is maximized in a competitive market when . options: The deadweight…

A: Meaning of Market: The term market refers to the situation under which the producers or the…

Q: The Blank 1 cost is the capital required for most of the activities in the acquisition phase. Blank…

A: Cost of Acquisition (COA) refers to any capital expenditure made at the time a capital asset is…

Q: 33. The expenditure approach to calculating GDP for an open economy entails adding consumption,…

A: The expenditure approach is a strategy for computing a country's total national output (GDP) by…

Q: For an account paying 2.25% interest per quarter, determine the effective quarterly rate for the…

A: Here, it is given that the interest rate is 2.25% per quarter, which implies that the account gives…

Q: How is the demand for pizza different from the demand for pizza cooks?

A: Demand for a commodity refers to the amount of commodity that a consumer is willing to purchase, is…

Q: Explanation it correctly and details Q)According to the Phillips curve, if current output equals…

A: Phillips curve According to the Phillips curve, there is a stable and inverse link between…

Q: The Umezu Corporation produces books. When a book has a price of $25 per unit, it produces 20,000…

A: Price elasticity of supply measures the responsiveness of quantity supplied with respect to change…

Q: In our daily life we use credit cards and debits cards for payments. Are credits cards considered…

A: Anything that is extensively used as a medium of exchange and accepted as payment is considered to…

Q: There are only two suppliers of courses in finance in Brisbane, two private universi- ties:…

A: According to the game theory concept of Nash equilibrium, the impact of a game is at its best when…

Q: 9. In the aggregate expenditures model, a reduction in taxes may: Multiple Choice increase saving.…

A: The Aggregate Expenditures model is used to determine the level of GDP in the economy. When people…

Q: Define and give some examples of • inflation risk • diversifiable risk • non-diversifiable…

A: Inflation risk is when inflation will undermine an investment's returns through a decline in…

Q: 2. Classify each of the following items as a public good, a private good, a natural monopoly good,…

A: The commodity that is in turn made available for consumption to all the members of the economy are…

Q: "Germany's Bundestag approved a special defense fund worth €100bn ($110bn) to modernize its army, an…

A: An economy is a region that includes the production, distribution, and sale of products and…

Q: You borrowed $200 and repaid $211 at the end of the year. During the year, inflation was 0.7%. What…

Q: der the following table Previous question GDP Depreciation Corporate eamings Transfer Payments…

Q: Suppose the production function for high quality brandy is given by : Q = √KL Where q is the output…

A: Given information: Q = (KL)1/2 Capital is fixed at 100. Put K=100 => Q = (100L)1/2 => Q =…

Q: Price P₂ P B Supply+tax K O₂ Q Consumer surplus before the tax Based on the figure above,…

A: The figure shows that a tax is imposed on producers. The supply curve will shift to the left. This…

Q: The following equations describe the market for mapping printers in California: Demand: Price =…

A: The equilibrium is set up where the demand and supply are equal. The specific tax is imposed on the…

Q: "Even if there is full information and that wages and prices are fully flexible as what the…

A: Expansionary fiscal approach incorporates tax breaks, move installments, refunds and expanded…

Q: Given, the following demand function, explain the different coefficients and interprete their signs.…

A: Demand refers to the quantity which a consumer is willing to buy at given time and place. It is…

Q: You are the manager of World Wide Athlete, a chain of six sporting goods shops in your area. The…

A: Number of racing bikes sold per week when the price is $689.99= 15 During the sale, when the price…

Q: Focus on the concept of marginal propensity to consume and reflect on which of the following would…

A: A metric is the marginal propensity to consume we use in economics. It measures induced consumption,…

Q: Bureau of Economic Analysis Table 1.1.6. Real Gross Domestic Product, Chained Dollars [Billions of…

A: Consumption as percentage of GDP = [Consumption expenditure / GDP] * 100

Q: A perfectly competitive firm is expected to make a $0 economic profit in the long-run. What type(s)…

Q: In the long-run, aggregate supply is a horizontal line at the long-run price level people can…

A: However, in the long run, the level of prices has no impact on aggregate supply, which is instead…

Q: Discuss the effect of elasticity of demand on consumer and producer surplus and give examples.

A: Generally, elasticity measures how economic variables are responsive to a change in another…

Q: Ahlam grows carrots in her garden for home consumption. This activity is: a. Excluded from GDP…

A: Gross domestic product (GDP) measures the market value of final goods and services produced by an…

Question

6.
Determine whether the scenarios below lead to economies, diseconomies of scale or neither:
A. Neither
B. Diseconomies of Scale
C. Economies of Scale
1. Greater use of specialization and division of labor
2. Added bureaucracy
3. Higher demand for the product

The table below gives the long run cost data for producing computers. Find the long run average total cost of producing each unit, then determine if there are Economies of Scale, Constant Returns to Scale or Diseconomies of Scale at select
quantities.
Which describes our situation when quantity increases from 2 to 3?
OEconomies of Scale
ODiseconomies of Scale
OConstant Returns to Scale
What about when quantity increases from 3 to 4?
OEconomies of Scale
ODiseconomies of Scale
OConstant Returns to Scale
Quantity Long run Total Cost in $ Long run Avg Total Cost in $
0
8
1
2
3
4
5
28
47
67
96
< Previous
138

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Question No.5

VIEW

Question No. 6

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Automobile manufacturing is an industry subject to significant economies of scale. Suppose there are four domestic auto manufacturers, but the demand for domestic autos is no more than 2.5 times the quantity produced at the bottom of the long-run average cost curve. What do you expect will happen to the domestic auto industry in the long run?
Do you think that the taxicab industry in large cities would be subject to significant economies of scale? Why or why not?
What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?
Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
What shape of a long-run average cost curve illustrates economies of scale, constant returns to scale, and diseconomies of scale?
How does fixed cost affect marginal cost? Why is this relationship important?
How do we calculate each of the following: marginal cost, average total cost, and average variable cost?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect me lung-nm average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?
What is the relationship between marginal product and marginal cost? (Hint: Look at the curves.) Why do you suppose that is? Is this relationship the same in the long run as in the short run?