Question: When firm A is increasing its output, it first experiences economies of scale, and then diseconomies of scale. Draw the graph of long run ATC

When firm A is increasing its output, it first experiences economies of scale, and then diseconomies of scale. Draw the graph of long run ATC for firm A. Draw one curve only.

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=+ e. What must the saving rate be to reach the Golden Rule steady state?

=+ d. What will the capitaloutput ratio be at the Golden Rule steady state? (Hint: For the CobbDouglas production function, the capitaloutput ratio is related to the marginal product of capital.)

=+c. Suppose that public policy raises the saving rate so that the economy reaches the Golden Rule level of capital. What will the marginal product of capital be at the Golden Rule steady state?