Are the short-run and long-run average cost curves U-shaped for the same reason? Explain
What will be an ideal response?
The short-run average cost curve is U-shaped because of the law of diminishing returns. The long-run supply curve is U-shaped because of diseconomies of scale.
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If business firms are more optimistic during the expansion phase of the business cycle, they
A) raise their expected rates of return on projects and investment increases. B) lower their expected rates of return on projects and investment increases. C) raise their expected rates of return on projects and investment decreases. D) lower their prices and increase investment.
Marginal cost a. Is the incremental cost incurred by producing an additional unit of output. b. Is the total cost of production
c. Is the total fixed cost of production. d. None of the above
Cartels engage in price fixing in order to:
A. drive out competition. B. retain customers. C. increase profits. D. promote entry.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Suppose Country B's population of workers increased to 600. Which of the following statements is now true?
A. Country B's production possibilities are now more limited because of crowding from having more workers. B. Country B's production possibilities curve has shifted straight out. C. Country B's production possibilities curve has rotated out for only production of iPods. D. Country B's production possibilities curve has shifted straight in.