ECON 1900 Study Guide - Marginal Cost, Perfect Competition, Fixed Cost

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amaranthmuskrat712

21 Feb 2013

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Document Summary

Total revenue is ; total short run cost is and total variable cost is . Total revenue is ; total short run cost is and total fixed cost is . Total revenue is ; total short run cost is and total fixed cost is . If there are 200 identical firms in this industry, draw in the short run. Label the original price, firm quantity, and industry quantity p0, q0, q0 on the diagram. Now suppose there is a shock: the canadian government imposes a per unit tax on widget production of per unit. (variable costs increase) Q: the graphs below represent the perfectly competitive constant cost gadget industry and representative firm. The original price, firm quantity, and industry quantity are labelled p0 , q0, Now suppose there is a shock: the canadian government imposes a yearly licence fee on all firms in the gadget industry. (fixed cost increases)

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.