What kinds of variable costs would she encounter? What identifies those costs as variable?
Answer to relevant QuestionsExplain the law of diminishing returns. How does it relate to the cost of labor? Why is the long-run average total cost curve described as an envelope curve? What is it enveloping? Plot TFC and TVC and compare the graphs to the TC curve. What relationship do you see? According to the MR = MC rule, when the firm is producing at an output level where MR > MC, the firm should produce more. Explain. Four firms produce four different goods. Deter mine which firms should shut down in the short run and/or in the long run, given the following data for each.
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