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Author Question: What is the optimal scale of plant? What will be an ideal ... (Read 73 times)

kellyjaisingh

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on: Jun 29, 2018
What is the optimal scale of plant?
 
  What will be an ideal response?

Question 2

Why are indifference curves convex to the origin?
 
  What will be an ideal response?


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Sarahjh

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The optimal scale of plant is the scale of plant that minimizes long-run average cost.

Answer to Question 2

Indifference curves are convex because of diminishing marginal utility. When a consumer has a large amount of good Y (and a small amount of good X), he will be willing to give up a great deal of good Y to receive a little more of good X. However, if the individual has only a small amount of good Y and a large amount of good X, he will not be very willing to give up good Y to receive more of good X.


kellyjaisingh

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Reply 2 on: Jun 29, 2018
:D TYSM

parshano

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Reply 3 on: Yesterday
Wow, this really help

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