ECON 101 Lecture Notes - Lecture 15: Takers, Market Power, Perfect Competition

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rosebutterfly172

22 Aug 2020

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Relationship between short-run and long-run average total cost: Cost of factories= fixed in short-run, but may expand so is variable in the long-run long-run average-total-cost curve is must flatter u-shape than the short-run average-total-cost curve. Economies and diseconomies of scale: quantity of output increases quantity of output increases. Economies of scale: property whereby long-run average total cost falls as the. Diseconomies of scale: property whereby long-run average total cost rises as the. Constant returns to scale: property whereby long-run average total cost stays the. Economies of scale often arise as higher production levels allow specialization. Diseconomies can arise due to coordination problems same as the quantity of output changes. Also sometimes; firms can freely enter or exit the market in the long run. Actions of single buyers or sellers has a negligible impact upon the market price, so buyers and sellers take the market price given.

Related Questions

36) A firm encountering economies of scale over some range of output will have a:

a) rising long-run average cost curve.

b) falling long-run average cost curve.

c) constant long-run average cost curve.

d) rising, then falling, then rising long-run average cost curve.

37) When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) a violation of the law of diminishing returns.

38) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

a) economies of scale.

b) normative economies.

c) diminishing marginal returns.

d) an increasing marginal product of labor.

39) If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) increasing the average total costs.

40) Economies and diseconomies of scale explain why the:

a) short-run average fixed cost curve declines so long as output increases.

b) marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c) long-run average total cost curve is typically U-shaped.

d) short-run average variable cost curve is U-shaped.

jadeshark411

constant costs

increasing returns to scale

constant returns to scale

isocost curve

decreasing returns to scale

isoquant

diseconomies of scale

long-run average cost

economies of scale

long-run marginal cost

economies of scope

marginal rate of technical substitution

expansion path

short-run expansion path

___A curve that displays all the various combinations of inputs that will produce a given amount of output.

___The rate at which one input is substituted for another along an isoquant.

___Line that shows all the possible combinations of inputs that can be purchased for a given total cost.

___A curve showing all of the cost-minimizing levels of input usage for various levels of output.

___When the usage of all inputs is increased by an equal proportionate amount, output ___increases by exactly the same proportion.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a larger proportionate amount.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a smaller proportionate amount.

___Cost per unit in the long run.

___The change in long-run total cost per unit change in output.

___When long-run average cost falls as output increases.

___When long-run average cost increases with increases in output.

___Long-run average and marginal costs are equal for all levels of output.

___The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods.

___Horizontal line showing the cost-minimizing input combinations for various output levels when capital is fixed in the short run.

aquamarineguinea-pig889

Which of the following statements is not correct? *
A) The real cost of producing X is the quantity of products, R, S, or T etc., which could have been produced with the resources devoted to X.
B) Diseconomies of scale arise primarily from the difficulties in managing and coordinating a large-scale business enterprise.
C) The law of diminishing returns explains the fact that the long-run average total cost curve is U-shaped.
D) Average fixed costs diminish so long as output increases.

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ECON 101 Lecture Notes - Lecture 15: Takers, Market Power, Perfect Competition

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