Calculate a cost function from a production function and explain how economic costs differ from accounting costs.

Q: What is Explicit Cost?

A: The cost of production is the cost incurred in the process of production in the economy by a firm.…

Q: The statements and equations show various ways of defining average variable cost, marginal cost, and…

A: Average Variable cost refers to the variable cost per unit. It can be calculated as follows: In…

Q: If marginal physical product is continually declining, what does marginal cost look like?

A: The marginal physical product is the additional output which can be produced by the firm by…

Q: Explain the difference between total cost, average cost, and marginal cost.

A: Economic cost: The economic cost is different from the accounting cost. Economics cost involves…

Q: Why does the average fixed cost falls with the increase in output?

A: Fixed cost is that cost which doesn't Change in the short run as the production proceeds.  Average…

Q: The minimum average cost occurs when the average cost is equal to the marginal cost.

A: The total cost incurred by a firm includes fixed cost and variable cost. Fixed costs are the costs…

Q: Is it true or not that the marginal cost  C′(x) is equal to the average cost at the critical points…

A: Average cost is the cost of making a single product calculated by dividing the Total cost by the…

Q: What is the typical shape of the average fixed cost curve, Why is it shaped this way. Graphically…

A: Average Fixed Cost (AFC) is the cost that must be incurred in fixed quantity regardless of the level…

Q: how do you find the total fixed cost if you don't know total variable cost

A: To determine the TFC of the whole table, we just need to find TFC of any quantity because TFC…

Q: Total Marginal Cost (using total cost) Quantity Variable Marginal Cost Cost Cost (using variable…

A: Fixed cost of production is that portion or part of firm's costs which remains same at each level of…

Q: Which of the following is an example of an implicit cost? A) the cost of fuel and materials. B) the…

A: Implicit cost is also called opportunity cost. It is the cost that is incurred but not reported…

Q: Define economies of scale

A: Economy of scale is a microeconomic term used as an important element of productivity growth.…

Q: Average total cost decreases when marginal cost is average tot. less than greater than equal to

A: Average cost(AC) is the division of total cost(TC) by the total quantity produced. It is the…

Q: When thinking about cost analysis in Microeconomics, what are the real-world problems that occur…

A: Economies of scale are cost savings that can arise when a business expands the production scale and…

Q: If a production function exhibits decreasing returns to scale, then the average variable costs are…

A: ANSWER STEP-1 If A Production Function Exhibits Decreasing Returns To Scale, Then The Average…

Q: Why is a cost function a derived function

A: Cost functions are derived functions. Because they are derived from the technological relationships…

Q: Discuss the main feature behind the long run average cost curve in terms of usage of input.

A: In the long run , all factors are variable and nothing is fixed.The long-run average cost curve…

Q: Explain why the average variable cost curve and the average total cost curve get closer to each…

A: In the short run the inputs are both fixed and variable, so all the costs incurred are also fixed…

Q: With a Cobb-Douglas production function of Y = K$L5, What are the marginal product of capital and…

A: A production function illustrates the relationship between the inputs used and output produced in a…

Q: Give an quantitative example of marginal and average cost.

A: Average cost is the equivalent of total fixed cost (TFC) and total variable costs (TVC) divided by…

Q: Explain the relationship between the production function and the average costs and marginal costs…

A: Answer: Production function/Total product: production function shows the relationship between output…

Q: Is fixed cost always smaller than total cost ?

A: The question talks about the two terms i.e., fixed cost and total cost.

Q: Why would labor be treated as a variable cost? labor costs will decrease as the firm produces more…

A: Fixed cost refers to the cost which remains same at all levels of output. It is independent of…