f) Both the short-run and the long-run average cost curves are g) Marginal reven
ID: 1220230 • Letter: F
Question
f) Both the short-run and the long-run average cost curves are g) Marginal revenue curve lies below the demand curve for a pure monopoly h) A short-run supply curve of a firm is the upward segment of marginal cost i) Both the perfectly competitive and monopolistically competitive firms eann j) The downward sloping part of a marginal revenue product of labor curve approximately U-shaped but for different economic reasons. firm at various levels of output. curve starting from minimum AVC. only zero economic profit in the long run but at different levels of output. is a labor-demand curve.Explanation / Answer
f)
AC=AFC+AVC
at first, when output increases AFC and AVC falls till it reaches minimum but at one point the variable cost start to rise and it rise faster than FC then combined effect causes AC to rise hence shape becomes U-shaped
Because of increasing return at first and then decreasing return that is u Shaped
When in the short-run a firm increases its production due to indivisibility of fixed factors, it gets various internal economies which cause SAC to fall. After a certain point SAC rises when there is operation of internal diseconomies. Hence, SAC becomes ‘U’ shaped.
Whereas LAC is u shaped because of firms choosing to operate on low cost plants due to economies of scale,
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.