/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q.22 Suppose that the firm boosts its... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 22: Q.22 (page 509)

Suppose that the firm boosts its scale of operations from a level consistent with short-run average cost curve SAC3to shortrun average cost curve SAC5. Explain what happens with respect to economies or diseconomies of scale.

Short Answer

Expert verified

The economies of scale is a cost advantage delighted in by the organizations, it happens when the expansion in plant size prompts the below expenses for the organizations.

Step by step solution

01

Introduction

The diseconomies of scale are only inverse of economies of scale when the firm grows the creation prompts expansion of normal expense.

02

Explanation

The diseconomies of scale lead to restricting the extension of results, a portion of the diseconomies of scale is because of co-appointment disappointment, low inspiration for labourers in the organizations, head specialist issues and so forth. The best illustration of economies of scale is specialization and division of work. This empowers the labourers to do proficient assignments with a little preparation so this prompts a below complete expense.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Suppose that a firm's only variable input is labor, and the constant hourly wage rate is 20 per hour. The last unit of labor hired enabled the firm to increase its hourly production from 250 units to 251 units. What was the marginal cost of producing 251 units of output instead of 250 ?

Suppose that a firm's only variable input is labor. The firm increases the number of employees from four to five, thereby causing weekly output to rise by two units and total costs to increase from 3,000per week to 3,300per week.

a. What is the marginal product of hiring five workers instead of four?

b. What is the weekly wage rate earned by the fifth worker?

Suppose that a company currently employs 1,000workers and produces 1million units of output per month. Labor is its only variable input, and the company pays each worker the same monthly wage. The company's current total variable costs equal $2million.

a. What are average variable costs at this firm's current output level?

b. What is the average product of labor?

c. What monthly wage does the firm pay each worker?

During the past year, a firm produced 10,000laptop computers. Its total costs were \(5 million, and its fixed costs were \)2 million. What are the average variable costs of this firm?

Consider Figure 22-6. Suppose that the current scale of output for a typical firm facing this LAC curve, which applies to all firms in this industry, is between points A and B, at about 500 units per period. If a new firm entering the industry desires to produce at the minimum efficient scale, would it wish to produce 10 units per period, 500 units per period, or 1,000 units per period? Explain.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.