What are the functions for MC and AC if TC = 100q + 100 ? Are the returns to scale increasing, decreasing, or constant?
What will be an ideal response?
MC = 100 + 200q
AC = 100 + 100q
Since AC increases with an increase in output, there are decreasing returns to scale.
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Bob and Bill can make 16 toys each if they devote 8 working hours in a day. Further, Bob can repair 4 cars and Bill can repair 2 cars, if they devote 8 working hours in a day. What is the opportunity cost of repairing one car to Bill?
a. 10 toys b. 8 toys c. 16 toys d. 12 toys e. 4 toys
Which of the following statements is true?
a. Private international foreign exchange transactions affect the monetary base. b. Both private foreign exchange transactions and central bank interventions in the foreign exchange market affect the monetary base. c. Neither private foreign exchange transactions nor central bank interventions in the foreign exchange market affect the monetary base. d. Central bank interventions in the foreign exchange market affect the monetary base.
When the coupon rate on newly issued bonds increases from 5% to 6%, the prices of existing bonds:
A. increase. B. remain unchanged. C. increase only if the coupon rate is less than 6%. D. decrease.
Fixed costs of production in the short run
A. are low in proportion to variable costs in the short run. B. are a function of the level of variable costs. C. increase as the firm produces more output. D. cannot be reduced by producing less output.