Video TranscriptHello, everyone and welcome so with regard to the total cost. Let'S talk about the short run and then let's talk about the long run, so in the short run, your total cost is equal to your total fixed cost. So that would be like if i was operating a shoe selling business, then the fixed cost would be like the machines that i have to import to manufacture these shoes. So that's a fixed cost, no matter how many units i sell that costs it's going to be there, i'm going to have to buy that machine, plus the total variable cost, which is the cost that is contingent on the number of units you are producing. So that's what happens in the short run and in the long run, though, what's happening is that your total, fixed cost does not really matter. In the long run, your total cost will be 0. If the input i mean, if the output is 0, so this total fixed cost, it doesn't really apply in the long run. Instead, your total, in the long run, your total cost will be equal to the total variable cost. You will disregard the fixed cost, so the total cost is equal to the total variable cost in the long run. So these are the 2 differences between the short run and the long term production. So if we examine our answer choices, we have in the long run, the average cost curve is always downward sloping. That is not necessarily true. In the long run, the quantities all inputs are fixed note. That is definitely not true. It'S the opposite. Actually, in the long run, the firm's fixed costs are greater than its variable costs. No once again we're disregarding those fixed costs in the long run. In the long run, the total variable cost equals the total fixed cost. Now that looks very promising and let's just look at e before we make our decision in the long run, all costs are areable costs well, not necessarily mean you'll still have fixed costs, but they just won't be regarded in. That particular sense that we see in the short run, so the right answer is going to be d, because we see as much over hereing. Show Video TranscriptHello, everyone and welcome so with regard to the total cost. Let'S talk about the short run and then let's talk about the long run, so in the short run, your total cost is equal to your total fixed cost. So that would be like if i was operating a shoe selling business, then the fixed cost would be like the machines that i have to import to manufacture these shoes. So that's a fixed cost, no matter how many units i sell that costs it's going to be there, i'm going to have to buy that machine, plus the total variable cost, which is the cost that is contingent on the number of units you are producing. So that's what happens in the short run and in the long run, though, what's happening is that your total, fixed cost does not really matter. In the long run, your total cost will be 0. If the input i mean, if the output is 0, so this total fixed cost, it doesn't really apply in the long run. Instead, your total, in the long run, your total cost will be equal to the total variable cost. You will disregard the fixed cost, so the total cost is equal to the total variable cost in the long run. So these are the 2 differences between the short run and the long term production. So if we examine our answer choices, we have in the long run, the average cost curve is always downward sloping. That is not necessarily true. In the long run, the quantities all inputs are fixed note. That is definitely not true. It'S the opposite. Actually, in the long run, the firm's fixed costs are greater than its variable costs. No once again we're disregarding those fixed costs in the long run. In the long run, the total variable cost equals the total fixed cost. Now that looks very promising and let's just look at e before we make our decision in the long run, all costs are areable costs well, not necessarily mean you'll still have fixed costs, but they just won't be regarded in. That particular sense that we see in the short run, so the right answer is going to be d, because we see as much over hereing. This discussion on Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the leastcost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? is done on EduRev Study Group by CA Foundation Students. The Questions and Answers of Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the leastcost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? are solved by group of students and teacher of CA Foundation, which is also the largest student community of CA Foundation. If the answer is not available please wait for a while and a community member will probably answer this soon. You can study other questions, MCQs, videos and tests for CA Foundation on EduRev and even discuss your questions like Which of the following statements concerning the long-run average cost curve is false?a)It represents the least-cost input combination for producing each level of output.b)It is derived from a series of short-run average cost curves.c)The short-run cost curve at the minimum point of the long-run average cost curve represents the leastcost plant size for all levels of output.d)As output increases, the amount of capital employed by the firm increases along the curve.Correct answer is option 'C'. Can you explain this answer? over here on EduRev! Apart from being the largest CA Foundation community, EduRev has the largest solved Question bank for CA Foundation. Which of the following statements is true about the long run average cost curve?The correct answer is: E) In the long run, all costs are variable costs.
What is Long Run average cost Lrac curve?The long-run average cost (LRAC) curve shows the firm's lowest cost per unit at each level of output, assuming that all factors of production are variable. The LRAC curve assumes that the firm has chosen the optimal factor mix, as described in the previous section, for producing any level of output.
What is Lrac curve in economics?The long-run average cost (LRAC) curve is a U-shaped curve that shows all possible output levels plotted against the average cost for each level. The LRAC is an “envelope” that contains all possible short-run average total cost (ATC) curves for the firm. It is made up of all ATC curve tangency points.
What are the features of long run average cost curve?The long-run cost curve is a cost function that models this minimum cost over time, meaning inputs are not fixed. Using the long-run cost curve, firms can scale their means of production to reduce the costs of producing the good.
|
Which of the following statements concerning the long-run average cost (LRAC curve is correct)
zusammenhängende Posts
Urheberrechte © © 2024 defrojeostern Inc.
