What are the functions for MC and AC if TC = 100q + 100 ? Are the returns to scale increasing, decreasing, or constant?
What will be an ideal response?
MC = 100 + 200q
AC = 100 + 100q
Since AC increases with an increase in output, there are decreasing returns to scale.
Economics
You might also like to view...
Industries in which firms have high fixed costs and low marginal costs are likely to have a:
A. large number of small firms. B. large number of large firms. C. small number of small firms. D. small number of large firms.
Economics
If we hold ideas, education, and labor constant, then output (GDP) is a function of
A) human capital. B) physical capital. C) the skill of labor. D) research capital.
Economics