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In the long-run, a firm’s cost of production are shown by the long-run average cost curve.
1) What forces explain the typical shape of the long-run average cost curve?
2) How are the law of diminishing returns and diseconomies of scale different?
3) How is the shape of the long-run average cost curve related to what the firms in an industry will look like: will there be lots of firms or just a few, or perhaps even just one? Will all the firms be about the same size or will firms of different size coexist? (How do you know?)
Illustrate what is the macroeconomic relationship with the article, "Squaring the Economic Circle" by Art Buchwald.
Using information given: What is average cost of first do these of a new drug. What about marginal cost of subsequent doses? Is this consistent with behaviour of costs for an information product.
Suppose that two countries are exactly alike in every respect except that the citizens of country A have a higher depreciation rate than the citizens of country B. a) Which country will have the higher level of output per worker in the steady state?
Assume that Dr. Slight has $300 to spend on goods X and Y. Good X costs $5 per unit and Good Y costs $3 per unit. Dr. Slight combines X and Y using a very strict ratio to derive utility. He can only increase his level of wellbeing by receiving more o..
Elucidate, with the aid of demand and supply curves, the impact of increased crime on the demand for private security services. On your diagram, show the changes in the equillibrium price and quantity.
A manufacturing company invests $100,000 in a new piece of equipment. Operating expenses for this new piece of equipment is estimated to be $4,000 starting EOY1 and increasing by $200 per year at the EOY2 and for the next 9 additional years. Draw a c..
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Explain the impact of economies of scale on the capacity of a firm. Understand how to use decision trees to analyze alternatives when faced with the problem of adding capacity.
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