Suppose a watch firm faces the short-run average total cost curves and the long-run average total cost curve that envelops them, shown here. Which short run average total cost structure would it choose if it plans to produce 100 watches? 400 watches? Explain.
Answer to relevant QuestionsComplete the table. According to the MR = MC rule, when the firm is producing at an output level where MR > MC, the firm should produce more. Explain. Suppose the demand curve is downward sloping, as shown in the following table. Calculate marginal revenue at each output level. Describe the major factors distinguishing market structures. Complete the table for a Taco Bell burrito special, using any numbers you wish, to illustrate the impact on Taco Bell of (1) Wendy's most effective advertising and (2) its more moderate effective advertising. Explain your ...
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