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5 Jul 2018
a) Explain why earning zero economic profit is not as bad as it sounds. b) What is the difference between the law of diminishing marginal returns and diseconomies of scale? Briefly explain what causes diseconomies of scale. c) Why is the Average Total Cost curve U-shaped? d) Explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal costs are rising. e) What economies of scale and economies of scope exist in (a) oil refining; (b) banking?
a) Explain why earning zero economic profit is not as bad as it sounds. b) What is the difference between the law of diminishing marginal returns and diseconomies of scale? Briefly explain what causes diseconomies of scale. c) Why is the Average Total Cost curve U-shaped? d) Explain why a firm might want to produce its good even after diminishing marginal returns have set in and marginal costs are rising. e) What economies of scale and economies of scope exist in (a) oil refining; (b) banking?
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teacherrecoLv10
20 Mar 2022
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Bunny GreenfelderLv2
5 Jul 2018
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