Distinguish between economies of scale and economies

Reference no: EM133380708

Questions:

1) If the firm's average cost curves are U-shaped, why does its average variable cost curve achieve its minimum at a lower level of output than the average total cost curve?

Q2) Distinguish between economies of scale and economies of scope. Why can one be present without the other?

Q3) A chair manufacturer hires its assembly-line labor for $30 an hour and calculates that the rental cost of its machinery is $15 per hour. Suppose that a chair can be produced using 4 hours of labor or machinery in any combination. If the firm is currently using 3 hours of labor for each hour of machine time, is it minimizing its costs of production? If so, why? If not, how can it improve the situation? Graphically illustrate the isoquant and the two isocost lines for the current combination of labor and capital and for the optimal combination of labor and capital.

Q4) If a firm enjoys economies of scale up to a certain output level, and cost then increases proportionately with output, what can you say about the shape of the long run average cost curve?

Q5) What are the average fixed cost, average variable cost and average cost of a firm? How are they related?

Reference no: EM133380708

Questions Cloud

Problem of suffering : According to Antony, what's wrong with the following response to the problem of suffering?

Identify and explain any two ways to expand or increase : Identify and explain any two ways to expand or increase the production possibility frontier of a country. Support your answer with the help of a diagram.

Can we expect social bargaining to work in lower stake : but many others do not and indeed increase their pollution. Can we expect social bargaining to work in lower stake conditions, not high stakes conditions

Pythagorean notion of metempsychosis : Plato seems to be influenced by the Pythagorean notion of metempsychosis.

Distinguish between economies of scale and economies : Distinguish between economies of scale and economies of scope. Why can one be present without the other?

Will you buy another novel this month : The total benefit (value) you've enjoyed from two novels you've purchased this month is $20. You estimate your total benefit will increase to $25

How might view known as social relativism : How might view known as social relativism, if adopted, prevent us from thinking about morally suspect cultural practices such as female genital mutilation

What communication strategies should you use : Can you share an example where you have utilized your professional network to achieve a personal goal? Also, what communication strategies should you use when

Government of kuwait is considering granting the bidoon : The government of Kuwait is considering granting the Bidoon - a group of stateless Arabs descended from nomadic Bedouins

User Account

All Pages