Question

In the profit maximization graph, why does the MC curve first drop and than starts rising again?

Answer #1

The MC curve is U-shaped which shows that as the firm increases its production,the MC curve first starts decreasing and then starts increasing.

Because when the firm increases its output,its total cost increases along with its variable cost at a diminishing rate.The MC curve will keep decreasing until the firm is experiencing economies of scale until it reaches its minimum point.Then with an increase in output,the firm will experience diseconomies of scale which will increase the cost at an increasing rate and so the MC curve will start increasing at an increasing rate.

Draw the marginal cost (MC) curve for a typical firm. Why does
MC eventually increase? Explain fully. Where is MPL maximized along
the MC curve? Why? Marginal cost is the slope of which
function?

1. Draw a linear market demand curve. Assuming that MC is
constant, determine the
profit maximizing output and price for the first firm to enter
the market. Now carefully
derive the demand curve for a new entrant who behaves as a
Cournot duopolist. What are
that firm's optimal price and output? How will the first firm
adjust output and price in
response to the new firm's presence?
2. Identify and briefly discuss five conditions which are
conducive to collusion.

For a weak acid/strong base, why is the initial region of
titration curve flat? Why does the curve rise suddenly? What is
special about the center point of the rapidly rising region? Why is
the region after the rapid rise flat?

A) What relationship does the IS curve plot? Explain, in words
and graphically, why the IS curve slopes downward. Be sure to label
the graph properly.
B) What relationship does the LM curve plot? Explain, in words
and graphically, why the LM curve slopes upward. Be sure to label
the graph properly.

Does an oligopoly or a monopolistically competitive firm have a
supply curve? Why or why not? Explain with a graph.

The graph illustrates an average total cost (ATC) curve (also
sometimes called average cost), marginal cost (MC) curve, average
variable cost (AVC) curve, and marginal revenue (MR) curve (which
is also the market price) for a perfectly competitive firm that
produces toy spaceships. Please answer the three questions,
assuming that the firm is profit maximizing and does not shutdown
in the short run.
What is the firm's total revenue?
$
What is the firm's total cost?
$
What is the...

Short Run Cost
1)Why is the ATC U-Shaped?
b)Why is marginal curve upward sloping in the short run ?
c)Where and why does the MC curve cross the ATC curve?
d)Given values for ATC and AVC,how would you determine Fixed
cost (what are the steps necessary to get from the first twoto the
last one )?
e)Given ATC,how would you determine total cost?
f)Graphically show and verbaly explain what the general pattern
of and relationship between fixed cost,variable cost and...

Which of the following statements is true about profit, revenue
and cost?
A.
In economics, π means “profit”.
B.
Profit equals to revenue minus cost.
C.
π = R – C
D.
All above are true.
0.4 points
QUESTION 2
The relationship between quantity of input and total quantity of
output is _____________
A.
Production function.
B.
Total cost function.
C.
Total revenue curve.
D.
Marginal production curve.
0.4 points
QUESTION 3
Which of the following statements is...

2.) For a price-searcher, assume
the demand curve is Q = 20 - P.
a.) Construct a
four-column table of P and Q with P ranging from 20 to
0. Calculate TR and MR and add them to your table.
b.) Graph D and MR. (Plot
points—with $ on the vertical axis and Q on the horizontal
axis.)
c.) Why is P > MR
(after the first unit)
3.) Using the same
price-searcher, assume the firm faces the...

Suppose adults have the following demand curve for a local
community theater: Pa=30-(1/5)Qa . Children have the demand curve
Pc=10-(1/10)Qc .Furthermore, MC=AC=2.
a. (6 pts) Solve for the price charged and number of tickets
sold in each separate market. Draw a graph for each market.
b. (6 pts) Calculate the total consumer surplus, total producer
surplus, and monopoly profit.
c. (6 pts) Now assume the theater wants to charge a single,
uniform price in both markets. Find the aggregate demand...

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