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Author Question: The above figure shows the short run cost curves for a typical firm in a competitive market. If ... (Read 93 times)

formula1

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on: Jul 1, 2018
The above figure shows the short run cost curves for a typical firm in a competitive market. If price = 4, then the firm
 
  A) is earning positive profits.
  B) should produce 35 units.
  C) should shut down.
  D) None of above.

Question 2

For each of the following functions, describe returns to scale.
 
  a. Q = K + L
  b. Q = K1/2L3/4
  c. Q = K2L


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fffftttt

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Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

a. Constant returns to scale.
b. Decreasing returns to scale.
c. Increasing returns to scale.


formula1

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Reply 2 on: Jul 1, 2018
YES! Correct, THANKS for helping me on my review

cpetit11

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Reply 3 on: Yesterday
Excellent

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