Author Question: In the above figure, the long-run average cost curve exhibits diseconomies of scale A) between 5 ... (Read 79 times)

Collmarie

  • Hero Member
  • *****
  • Posts: 569
In the above figure, the long-run average cost curve exhibits diseconomies of scale
 
  A) between 5 and 10 units per hour.
  B) between 10 and 20 units per hour.
  C) between 20 and 25 units per hour.
  D) along the entire curve.

Question 2

In the long run, perfectly competitive firms cannot make an economic profit. Why?
 
  What will be an ideal response?



TDubDCFL

  • Sr. Member
  • ****
  • Posts: 357
Answer to Question 1

C

Answer to Question 2

An economic profit attracts entry by new firms. As new firms enter the market, the market supply increases and the market supply curve shifts rightward. The increase in supply decreases the price. And, as the price falls, the economic profit is eliminated.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

If you could remove all of your skin, it would weigh up to 5 pounds.

Did you know?

Approximately one in three babies in the United States is now delivered by cesarean section. The number of cesarean sections in the United States has risen 46% since 1996.

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

The modern decimal position system was the invention of the Hindus (around 800 AD), involving the placing of numerals to indicate their value (units, tens, hundreds, and so on).

For a complete list of videos, visit our video library