What would be American Airlines' marginal cost of adding a passenger to its Boeing 747 flight from Minneapolis to Seattle, assuming seats are available? Explain.
Answer to relevant QuestionsWhy would you expect the time length of a long run to be different for different firms? At 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? 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 ...How does the MR = MC rule apply to loss minimization? Think in terms of market share and variety of goods. The ability or inability of firms to enter an industry differentiates the monopoly from a monopolistically competitive industry. Explain.
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