Discuss briefly short run and long run cost functions with examples
Discuss briefly short run and long run cost functions with examples
Homework Answers
Ans
Shortrun cost functions shows cost of producing a good as its the output of the good rises due to an increase in some inputs of production like labour, raw materials etc . But here some inputs are always fixed particularly the size of plant
On the other hand longrun cost shows the cost of a coodity as its output rises. Here all inputs are varied particularly the plant size.
. Define and explain the difference between the long run and the short-run production functions. Why...
. Define and explain the difference between the long run and the short-run production functions. Why are short-run costs higher than costs in the long run? Why are the short-run average and marginal cost curves U shaped? What generates a U shape for the long-run average and marginal cost curves?
For a constant cost industry in which all firms the same cost functions, their long-run average...
For a constant cost industry in which all firms the same cost functions, their long-run average cost is minimized at $10 per unit output and 20 units (i.e. q = 20). Market demand is given by QD=DP=1,500-50P. Find the long-run market supply function Find the long-run equilibrium price (P*), market quantity (Q*), firm output (q*), number of firms (n), and each firm’s profit. The short-run total cost function associated with each firm’s long-run costs is SCq=0.5q2-10q+200. Calculate the short-run average...
Discuss the short run and long run condition of both a monopoly and a perfect competition...
Discuss the short run and long run condition of both a monopoly and a perfect competition market structure .in words
Discuss the differences in technology and costs between the short-run and long-run. 750 words
Discuss the differences in technology and costs between the short-run and long-run. 750 words
What is the shape of the short-run and long-run demand and supply curves. Discuss what causes...
What is the shape of the short-run and long-run demand and supply curves. Discuss what causes shifts in the aggregate demand curve. Discuss what causes shifts in the aggregate supply curve.
10. For any output level, the short-run cost must be - the long-run cost.
10. For any output level, the short-run cost must be - the long-run cost.
8. Discuss what the short and long run effects of an inflow of labour into a...
8. Discuss what the short and long run effects of an inflow of labour into a country would have on factor returns and output.
#8 8. The long-run average cost curve is the envelope of the firm's short-run average cost...
#8
8. The long-run average cost curve is the envelope of the firm's short-run average cost curves, and it reflects the presence or absence of returns to scale. When there are increasing returns to scale initially and then decreasing returns to scale, the long-run average cost curve is U-shaped, and the envelope does not include all points of minimum short-run average cost.
The following graph shows the short-run average total cost curves and the long-run average total cost...
The following graph shows the short-run average total cost
curves and the long-run average total cost curve for a publishing
firm. The five marked quantities indicate points of tangency
between each short-run average total cost curve ( SRATC ) and the
long-run average total cost curve ( LRATC ); for example, Q1 marks
the point of tangency between SRATC1 and LRATC .
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average...
Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average total cost curve for a publishing firm.
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average total cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average total cost curve (LRATC); for example, Q1 marks the point of tangency between SRATC1 and LRATC The orange point on SRATCs indicates the firm's current output level in the short run (Q5). SRATC SRATC SRATC4...
10. For any output level, the short-run cost must be - the long-run cost.
#8
8. The long-run average cost curve is the envelope of the firm's short-run average cost curves, and it reflects the presence or absence of returns to scale. When there are increasing returns to scale initially and then decreasing returns to scale, the long-run average cost curve is U-shaped, and the envelope does not include all points of minimum short-run average cost.
The following graph shows the short-run average total cost
curves and the long-run average total cost curve for a publishing
firm. The five marked quantities indicate points of tangency
between each short-run average total cost curve ( SRATC ) and the
long-run average total cost curve ( LRATC ); for example, Q1 marks
the point of tangency between SRATC1 and LRATC .
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average...
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average total cost curve for a publishing firm. The five marked quantities indicate points of tangency between each short-run average total cost curve (SRATC) and the long-run average total cost curve (LRATC); for example, Q1 marks the point of tangency between SRATC1 and LRATC The orange point on SRATCs indicates the firm's current output level in the short run (Q5). SRATC SRATC SRATC4...
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