How and why does a firm’s average-total-cost curve differ in the short run and in the long run

Q: Explain how a firm can have constant returns to scale in production and economies of scale in cost.

A: Constant Returns to scale refers to the situation where with the change in the production, the cost…

Q: How and why does a firm’s average-total-cost curvein the short run differ from its…

A: Total cost (TC) equals the total fixed and variable costs. An average total cost function is the…

Q: How is the short-run average cost curve and the long-run average cost curve-shaped? What is the…

A: Short run average cost has fixed factors of production,whereas in long run average cost there are no…

Q: oth in the short - run and the long - run , average cost curves are U - shaped for different reasons…

A: Average cost is the per unit cost incurred in the production of a commodity. It is obtained by…

Q: The marginal cost curve intersects the average total cost curve at the level of output where average…

A: Marginal Cost (MC): Marginal cost occurs when producing an extra unit of output. Average total cost…

Q: Which of the following does not change with the level of output? O Total variable cost O Total fixed…

A: There is an inverse relationship between output and average fixed cost. When an increase in output…

Q: Explain and identify the relationship between total cost, average cost and marginal cost using…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: Why will firms in most markets be located at or close to the bottom of the longrun average cost…

A: Assuming, along these lines, a firm needs to build production in the short-run, it can do as such…

Q: What is the difference between production in the short run and production in the long run? Explain…

A: The short-run is a notion that states that at least one input is fixed while the others are variable…

Q: Consider a graph drawn with the average total cost curve and average variable cost curve. The…

A: Average total cost is the combination of average fixed cost plus average variable cost. So, the…

Q: Which of the following is not a variable cost at the sandwich shop? O Cost of labor

A: We have to find which is not a variable cost at the sandwich shop.

Q: The shape of the Total Product curve on the production side gives us the shape of which curve on the…

A: Total product curve represents   the total output of a firm in the short run.

Q: an output of 0?…

A: Average cost is calculated as the average of total cost, required to produce each unit of output.…

Q: Assume that the marginal cost of production is greater than the average variable cost. Can you…

A: The marginal cost of production is the incremental cost incurred when an additional unit of a good…

Q: Complete the following table, assumingthat each unit of labor costs $75 per day.…

A: Total cost is the sum of fixed cost and the variable cost. Fixed cost is fixed and does not vary…

Q: When examining the costs faced by a business, explain how economists distinguish between the short…

A: First part The contrast between the short and long runs is critical in economics. It turns out that…

Q: How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant,…

A: Here, an improvement in the technology used, would decrease the cost and will shift the cost curve…

Q: Tabaq sells roasted coffee. The information about their production of coffee is given below: Labor…

A: The marginal physical product of labor can be calculated as follows: Marginal physical product of…

Q: fall in the long-run cost curve

A: A cost curve which represents the minimum cost at which output can be produced in the long run is…

Q: you assume that a firm has a U-shaped average cost curve, why would large and small firms have…

A: The economies and diseconomies of scale lead to the U shaped average cost curve.

Q: What is the difference between production in the short run and production in the long run? Explain…

A: please find the answer below.

Q: Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be…

A: A firm's fixed costs are costs that do not change. It is irrespective of whether production or sales…

Q: In the short run, a firm's total costs of producing 100 units of output equal $10,000. If it…

A: The firms, and businesses are the entities who are involved in the production activities, and the…

Q: the main difference between the short run and the long run

A: Short run is a time period in which there are fixed costs and variable cost Fixed cost means the…

Q: Average fixed cost, average total cost a -Why does average fixed cost continuously fall as output…

A: Average fixed cost- It is the cost that is per unit of Total fixed cost. AFC=TFCQ Average total…

Q: What is the relationship between marginal product and marginal cost? Why do you suppose that is? Is…

A: Marginal Product: The term marginal product refers to the increase in total product due to the use…

Q: A firm has the following average total cost curves: Quantity ATC11 ATC22 ATC33 ATC44 1 100 150 50…

A: Answer-

Q: For an increase in output, average costs change by more in the short run than in the long run, but…

A: Average cost is the total cost per unit of output.  AC=TCQ

Q: following is a total cost curve. Calculate and sketch the corresponding MC curve. If the price of…

A: TC = Total revenue  MC = Marginal cost  TR = Total revenue  FC = fixed cost MR = Marginal revenue

Q: Which is the correct formula for the total cost of production?Note: TC is total Cost, AFC is average…

A: TC is the total cost of producing output TFC is the total fixed cost of producing output. It remains…

Q: a. Why is the gap or difference between average total cost and average variable cost larger at…

A: Cost is a metric of the possibilities foregone when one product or task is chosen over another.

Q: Which of the following statements about average and marginal cost is INCORRECT? (2) (1) The marginal…

A: MARGINAL COST CURVE: A graph that shows the relationship between a firm's marginal cost in the…

Q: Let F be the fixed cost of production, let VC be the variable cost of production, C be the total…

A: From the data given in the question,  Fixed cost remains same whether firms produces goods or not.…

Q: Which of the following is true at the output level where average total cost is at its minimum? OA…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: a) Complete the following table by filling in the fixed cost (FC), variable cost (VC), total cost…

A: Total Cost (TC) = Fixed cost (FC) + Variable cost (VC) or  Variable cost (VC) = Total Cost (TC) -…

Short-Run Costs and Long-Run Costs

Cost of short-run and the long-run is an economic term that describes the cost involved in the production of goods in a firm in the short as well as long period.