A bus company employs two drivers and a bus to provide a bus route. What is the returns to scale of the company? A. Diminishing returns to scale B. a large returns to scale C. Decreasing returns to scale O D. Constant returns to scale E. increasing returns to scale

A bus company employs two drivers and a bus to provide a bus route. What is the returns to scale of the company? A. Diminishing returns to scale B. a large returns to scale C. Decreasing returns to scale O D. Constant returns to scale E. increasing returns to scale

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Refer to Figure 7.3. Suppose a firm moves along the isoquant from point a to point b. The rate of…

A: The rate of substitution refers to the rate at which one input can be replaced by another input in…

Q: A3

A: In a market, when a firm faces U-shaped average cost curve in the long-run, it implies that the…

Q: 2.7 The concept of economies of scale refers to lower per- unit production costs at higher levels of…

A: Adam Smith is considered the father of economics. He was the first individual to notice that as long…

Q: Distinguish between/ among a. The short run total fixed cost, total variable cost and total cost…

A: Cost refers to the value of the resource(s) that gets exhausted in the process of production or…

Q: a) Fill in the table above b) Does this firm operate in short run or long run? Explain why? c)…

A: 1) TCn = TCn-1 + MCn 2) MCn = TCn -TCn-1 3) TC = TFC + TVC 4) AFC = TFC / NUMBER OF UNITS 5) ATC =…

Q: Draw an isoquant-isocost diagram consistent with points A and B on the long-run average cost curve…

Q: Costs 80 MC AVC ATC 120 160 180 200 Refer to the graph above to answer this question. What does…

A: Cost refers to all the expenses that incur in the process of production of goods or services. These…

Q: Like a good economist, you calculated the cost of getting your college degree, including the…

A: As a prudent economist, considering the full cost of a college degree involves not only direct…

Q: For a firm, constant returns to scale occur when the for the firm AFC ATC MC as the quantity…

A: ATC, or average total cost, is a term used in economics and business. It's a statistic used to…

Q: A certain amount of output can be produced by many small plants or one large plant. The large plant…

A: A firm in a market that can produce goods and services at the lowest average cost and increase…

Q: If a firm quadruples (4x) in size and output increases sixfold (6x), what is the returns to scale?

A: Here input increase 4× and output increase 6×

Q: Long-Run Q 10 90 AC $

A: In the short run, some inputs are fixed and some are variable. Whereas in the long run, all the…

Q: Discuss the connection between returns to scale and diminishing marginal product. Provide graphs to…

A: Definitions In the short run, increasing input after reaching maximum capacity while keeping at…

Q: Cost LRAC 40 30 20 10 100 200 400 800 Output c. What is the firm experiencing as it increased it…

A: The graph shows the long run average cost curve. c) If the firm increases the scale of operations…

Q: Explain the Law of Returns to Scale with the help of an example.

A: Long run refers to a period of time in which all the input of the firm are totally variable, that…

Q: Define Economies of Scale, Diseconomies of Scale, Constant returns to scale.

A: Economies of scale: Economies of scale are the cost advantage happens due to increase in…

Q: If a firm quadruples (4x) in size and output triples(3x), what is the returns to scale? a.…

A: The markets are the place where the buyers, and the sellers of the goods, services, and other…

Q: Is a type of cost which does not vary with the unit of production and will remain constant…

A: Cost refers to the money involved in producing the goods and services by the producers. They include…

Q: Suppose that a firm is currently operating producing 100 units at a total cost of $2,000. If they…

A: Economies of scale is when the increase in output decreases the long run average cost.Diseconomies…

Q: Use the graph below to answer the following question. 10 8 Long Run Average Total Costs

A: The long run average total cost curve (LRATC) shows the per unit total cost incurred by the firm in…

Q: A large-scale producer selling a wide range of soft drinks. (a) Outline and explain the sources of…

A: Diseconomies of scale occur when a business grows so large that the costs per unit increase. It…

Q: Can a firm have diseconomies of scale, econmies of scale and constant returns to scale

A: Economies of scale is when the ATC decreases with the increase in quantity. Diseconomies of scale…

Q: 800 Is 720 640 SRATC, 560 480 SRATC, 400 320 SRATC, 240 160 LRATC 80 100 200 300 400 500 600 700…

Q: Diseconomies of scale are present when. Select one or more: O a. total costs fall as output rises O…

A: Large firms may experience economies of scale or diseconomies of scale as their output grow.

Q: Define economics of scale and explain they might arise. Define diseconomies of scale and explain why…

A: Economies of scale apply to the property that as the quantity of product increases, the long-run…

Q: Average total costs are falling Average total costs are rising Average total costs are minimized O…

A: Average total cost is alluded to as the aggregate of all creation costs partitioned by the total…

Q: Assume a firm has the long run total cost presented in the table below. Output TC $8 $14 $18 4. $20…

A: The total cost of production is defined as the amount in monetary terms a firm incurs when it…

Q: If a firm triples inputs and produces twice the output, then there are constant returns to scale.…

A: Return to scale is a long-run concept that states the proportional change in output due to a…

Q: In the long-run Firm A incurs total costs of $1200 when output is 30 units and $1550 when output is…

A: Economies of scale (increasing returns to scale) is when the increase in output decreases the long…

Q: LRATC minimum ATC A between points A and B. B to the left of point A. to the right of point B. at…

A: Diseconomies of Scale : Diseconomies of scale can be defined as that situation when as output…

Q: 2.7 The concept of economies of scale refers to lower per- unit production costs at higher levels of…

A: The economies of scale takes place when there is reduction in the cost of production with the…

Q: Suppose a hotel exhibits constant returns to scale as it increases its output. If it increases all…

A: Returns to scale is about the relationship between input and output. It refers to the amount of…

Q: a large-scale producer selling a wide range of soft drinks. (a) Outline and explain the sources of…

A: Diseconomies of scale occur when a business grows so large that the costs per unit increase. It…

Q: How does the impact of fixed costs change production decisions in the short run and in the long run?…

A: Fixed cost refers to the cost which remains the same at each level of output. It means that fixed…

Q: Diseconomies of scale exist over the range of output for which the long-run average cost curve is a.…

A: The firms are considered to be the producers who work with the motive of earning maximum possible…

Question

A bus company employs two drivers and a bus to provide a bus route. What is the returns to scale of the company?
A. Diminishing returns to scale
B. a large returns to scale
C. Decreasing returns to scale
D. Constant returns to scale
E. increasing returns to scale
Reset Selection

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

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

Consider the following information on long run total costs: Output 1 2 3 4 5 6. 7 Total Costs 50 90 123 160 210 270 350 Decreasing returns to scale starts with the addition of the unit of output. Third Fifth Fourth Insufficient information
In the figure, the intersection of curves A and B is the point at which 20 16 12 20 40 60 80 Quantily (unts per day) O A. average total cost is minimized. B. average variable cost is minimized. OC. average fixed cost is minimized. OD. total product is maximized. Costs per unit (dollars per unit) 8.
QUESTION 1 When diseconomies of scale occur: CA. the long-run average total cost O B. marginal cost intersects average OC the long-run average total cost O D. average fixed costs curve falls total cost curve rises will rise
The lawn ranger , a landscaping company , has total costs of $15,000 and total fixed cost of $13000 .The lawn ranger's toal variables cost are a. indeterminate because the firm's output level is not known.b. $3,000.c. $5,000.d. $2,000.
Please give 2 examples of economies of scale, diseconomies of scale, and constant returns of scale. Provide explanations...
Consider the following graph: Average Total Cost (S) ATCA ATCB ATC ATCO Q₁ Q₂ Q3 Q5 At which points does the firm exhibit economies of scale? From Q3 to Q4 From Q2 to Q3 From Q1 to Q2 O From Q4 to Q5 Quantity of Tractors
Designated cost incurred by the short-run firm. Select one: a. fixed cost b. total cost c. variable cost d. average cost
$22 00 20.00 18.00 Which size bookstore is more likely to experience diseconomies of scale? Long-run Average cost OA Abookstore selling 1,000 books per month B. Abookstore seling 20,000 books per month C. Abookstore selling 40,000 books per month 1,000 20.000 Quantity of books sokd per month 40,00D,000 D. Abookstore seling 80,000 books per month Average cost
Suppose a firm's long-run average cost is increasing as the firm produces more output. Then the firm is said to be experiencing which of the following? a.constant returns to scale b.increasing returns to scale c.diminishing marginal product d.decreasing returns to scale
In the long run a company that produces and sells laundry detergent incurs total costs of $2,500 when output is 1,250 units and $2,750 when output is 1,500 units. For this range of output, the laundry detergent company exhibits a. diseconomies of scale. b. efficient scale. c. economies of scale. d. constant returns to scale.
SECTION B: IDENTIFICATION OF COST CURVES From Figure 1 Identify the cost curves 41, 42, 43, and 44. 41 Cost 42 43 44 Quantity of output Figure 1: Cost curves
If a business is experiecing diminishing marginal product of labor then A. its fixed costs must be increasing B. its total cots must be decreasing C. its marginal costs must be increasing D. its implict costs must be decreasing (please explain each choice)