Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1) Consider the long-run production of Bicycles. The cost of the indivisible inputs used in the production of bicycles is $6000 per day. To produce

1)Consider the long-run production of Bicycles. The cost of the indivisible inputs used in the production of bicycles is $6000 per day. To produce one Bicycle per day, the firm must also spend a total of $80 on other inputs-labor, materials, and other capital. For each additional bicycle, the firm incurs the same additional cost of $80.

a)Compute the average cost for 30 bicycles, 60 bicycles, 100 bicycles, and 300 bicycles.

Draw the long-run average cost curve for 30,60,100 and 300 bicycles per day.

1)Draw a graph of perfectly competitive market and explain equilibrium of the firm by choosing output level at which

a.P=MC=MR and Firm is making zero economic profit.

b.P=MC=MR and Firm is making a loss.

c.Explain shut down rule with the help of graph.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Personnel Administration And Labor Relations

Authors: Norma M Riccucci

1st Edition

1317461754, 9781317461753

More Books

Students also viewed these Economics questions