Question

Use the concepts of economies or diseconomies of scale to explain the shape of a firm’s...

Use the concepts of economies or diseconomies of scale to explain the shape of a firm’s long-run ATC curve.

Homework Answers

Answer #1

Economies of scale is a situation when the total cost of the production decrease as the production of the good increase and dis economies of scale is a situation when the cost of production increases as the firm produces more and more goods.

Economies of scale leads to a downward sloping ATC curve. i.e. as the firm is increasing the production the cost of production is decreasing that lead to a slope in the curve.

Diseconomies of scale will lead to a upward sloping ATC curve because as the firm is increasing the production the cost of production is increasing. The ATC will slope upward in the long run.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Distinguish economies and diseconomies of scale. How can the extent to which economies and diseconomies of...
Distinguish economies and diseconomies of scale. How can the extent to which economies and diseconomies of scale explain the size and number of real world firms in an industry.
Question 2 a. Define economies and diseconomies of scale and explain why they occur. [4 marks]...
Question 2 a. Define economies and diseconomies of scale and explain why they occur. [4 marks] b. Explain the relationship between total product, marginal product, and average product. [3 marks] c. What is the law of diminishing returns and what does it explain the shape of the short run average cost curve. [3 marks] d. Why is the level of output at which marginal revenue equals marginal cost the profit maximizing output? [4 marks]
Describe economies of scale and diseconomies of scale.
Describe economies of scale and diseconomies of scale.
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain...
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain why with reference to the values of ATC. Small production unit . Large production uni Q . FC VC       Q . FC . VC . 5 50 . 50 50 . 500 . 500 10 . 50 . 70 100 500 . 800 20 . 50 . 200 200 . 500 . 2500
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain...
Given the following information, does this firm has economies of scale or diseconomies of scale. Explain why with reference to the values of ATC. Small production unit . Large production uni Q . FC VC       Q . FC . VC . 5 50 . 50 50 . 500 . 500 10 . 50 . 70 100 500 . 800 20 . 50 . 200 200 . 500 . 2500
Explain the difference between the law of diminishing returns and economies of scale. How does the...
Explain the difference between the law of diminishing returns and economies of scale. How does the law of diminishing returns effect the average total cost curve? What are economies of scale (also called increasing return to scale) and diseconomies of scale (also called decreasing return to scale), and how do they effect the average total cost curve?
The shape of the Long Run Average Cost curve is determined by The law of diminishing...
The shape of the Long Run Average Cost curve is determined by The law of diminishing returns The law of diminishing returns and economies of scale Economies and diseconomies of scale The law of diminishing returns and diseconomies of scale   Profit maximizing purchasing of inputs occurs when: MPa/Pa=MPb/Pb=…=MPn/Pn VMPa/Pa=VMPb/Pb=…=VMPn/Pn =1 VMPa/MPa=VMPb/Pb=…=VMPn/Pn MPa/VMPa=MPb/VMPb=…=MPn/VMPn
why diseconomies of scale occur on the long-run average total cost curve falls?
why diseconomies of scale occur on the long-run average total cost curve falls?
How can the long-run average cost (LRAC) curve be derived from the short-run average total cost...
How can the long-run average cost (LRAC) curve be derived from the short-run average total cost (SRATC) curve? Describe economies of scale and diseconomies of scale. What are the determinants of economies of scale and diseconomies of scale, respectively? Using a real-world company (other than Sysco), explain the causes of economies of scale for your company. How would economies of scale help your company compete in its industry?
For each one, the long-run average cost curve eventually exhibits diseconomies of scale. For which firms...
For each one, the long-run average cost curve eventually exhibits diseconomies of scale. For which firms would you expect diseconomies of scale to set in at relatively low levels of output? Why? -A copy shop -A hardware store -A dairy -A newspaper -An automobile manufacturer -A vodka manufacterer -A toy store -A restaurant
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT