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Positive in an increasing cost industry

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a. If IRS are present, the optimal position for a firm to operate plant and equipment is at capacity which is defined as the minimum point on its SRAC curve for that output.

b. For a competitive firm whose cost structure may be characterized, for example, by a cubic equation, the profit function can be expressed as a relationship that depends upon price and quantity.

c. Long run profits are zero in a Constant Cost Industry but are positive in an Increasing Cost Industry.

d.. Explain the meaning of the condition w/MPL = r/MPK. How does it differ from MPL/w = MPK/r

Reference no: EM131709384

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