Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run there is free entry into the market. What is the efficient scale of production?
A. 5 gallons per day
B. 100 gallons per day
C. 20 gallons per day
D. 50 gallons per day
A. 5 gallons per day
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In order for the first player to move in a sequential game to be able to gain an advantage from making the first move, the player must:
A) possess a dominant strategy that is better than the other player's dominant strategy. B) be able to achieve a higher maximum payoff than the other player. C) follow the same strategy he would pursue in a Nash equilibrium. D) be able to make a credible commitment to the strategy.
A change in the distribution of income which leaves total income constant will not shift the market demand curve for a product if
a. everyone has an income elasticity of demand of zero for the product. b. everyone has the same income elasticity of demand for the product. c. individuals have differing income elasticities for the product, but the average income elasticity for income gainers is equal to the average income elasticity for income losers. d. any of the above conditions occur.
If both the supply and demand for computer games increase, then the equilibrium price of the games: a. is indeterminate and the equilibrium quantity rises
b. is indeterminate and the equilibrium quantity falls. c. falls and the equilibrium quantity also falls. d. falls and the change in equilibrium quantity is indeterminate.
A demand curve is described as perfectly elastic if
a. any quantity can be sold at a given price. b. the same quantity is sold regardless of price. c. neither price nor quantity demanded ever change. d. only price can change.