Efficient scale of operation and current production levels

Assignment Help Business Economics

Reference no: EM131244614

Assume that firms A and B have the same minimum efficient scale of operation and, at current production levels, both firms are incurring the same average costs of production. However, firm A's output is 5 times larger than firm B's output. How is this possible?

Reference no: EM131244614

Questions Cloud

What would be the impacts on producer surplus : The United States Census Bureau reported that household income dramatically increased in 2015. What would be the impacts on producer surplus?

Define market structure : It has been said that if government wishes to tax certain goods, it should tax goods that have inelastic rather than elastic demand. What is the rationale for this? Give examples and elaborate your arguments. Define “market structure.” What factors a..

What are some of the aspects of guerrilla marketing : Why is good marketing so crucial to the success of a small business? What are some of the aspects of guerrilla marketing? describe the steps in successful marketing practices for your small business and discuss why this technique is especially import..

Minimum wage will influence different labor markets : A minimum wage will influence different labor markets differently. In four separate market diagrams, illustrate the following cases: a competitive market in which causes a 50% reduction in labor demand; a competitive market in which the minimum wage ..

Efficient scale of operation and current production levels : Assume that firms A and B have the same minimum efficient scale of operation and, at current production levels, both firms are incurring the same average costs of production. However, firm A's output is 5 times larger than firm B's output. How is thi..

Modern theories of economic growth attempt to explain : What are the broad empirical regularities associated with growth and development that modern theories of economic growth attempt to explain? Please Enumerate and describe briefly.

Briefly what happens in the short run and in the long run : When the investment rate in a country decreases permanently (as a result of discouraging fiscal policy such as an increase in investment taxes, for example), does it impact the level or the growth rate of output per worker? Explain briefly what happe..

Summarizes the net effect of the listed bank transactions : Which of the following correctly summarizes the net effect of the listed bank transactions?

First order conditions of optimization from lagrangian : Suppose Jeffrey’s utility depends on the amount of time spent watching You Tube videos (Y) and the amount of time playing video games (V), and his utility function is equal to. Set up the Lagrangian equation for this constrained maximization problem...

User Account

All Pages