Chapter 7: Problem 20
Are there fixed costs in the long-run? Explain briefly.
Chapter 7: Problem 20
Are there fixed costs in the long-run? Explain briefly.
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Small Mom and Pop firms, like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this?
1What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?
31\. A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is \(\$ 1,000 .\) What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.
What are diminishing marginal returns as they relate to costs?
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