What do economists mean by downsizing?
Answer to relevant QuestionsAt relatively low levels of output, the firm's aver age fixed cost dominates its average total cost, but at relatively high levels of output, the firm's aver age variable cost dominates. Why? Plot TFC and TVC and compare the graphs to the TC curve. What relationship do you see? How does total revenue differ from total profit? Suppose the demand curve is downward sloping, as shown in the following table. Calculate marginal revenue at each output level. Explain why an economist and a zoologist, look ing at horses, cows, and automobiles, would not choose the same two out of three as belonging to a set.
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