Chapter 22: Q. 22.3LO (page 486)
Explain the short-run cost curves a typical firm faces.
The price structure of all firms is counteracted into some common underlying patterns.
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Discuss the difference between the short run and the long run from the perspective of a firm.
In the short run, a firm's total costs of producing units of output equal . If it produces one more unit, its total costs will increase to .
a. What is the marginal cost of producing instead of units of output?
b. What is the firm's average total cost of producing units?
c. What is the firm's average total cost of producing units?
Take a look at the Figure. Suppose that the firm decided to consider employing the 12th unit of labor, which it has determined would result in a decrease in total product to 370 units of output. If it were to do this, what would be the resulting average product of labour and the marginal product of labour?
An electricity-generating company confronts the following long-run average total costs associated with alternative plant sizes. It is currently operating at plant size .
a. What is this firm's minimum efficient scale?
b. If damage caused by a powerful hurricane generates a reduction in the firm's plant size from its current size to , would there be a leftward or rightward movement along the firm's long-run average total cost curve?
If this firm were to boost its output to 12 units of output and thereby raise its total variable costs to $54, what would be the resulting average fixed cost, average variable cost, average total cost, and marginal cost?
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