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Explain the relationship between a firm's short-run production function and its short-run cost function. Focus on the marginal product of an input and the marginal
- Explain the relationship between a firm's short-run production function and its short-run cost function. Focus on the marginal product of an input and the marginal cost of production.
- "If it were not for the law of diminishing returns, a firm's average cost and average variable cost would not increase in the short run." Do you agree with this statement? Explain.
- Explain the distinction made in economic analysis between the short run and the long run.
- Define economies of scale. How does this relate to returns to scale? Cite and briefly discuss the main determinants of economies of scale.
- Define diseconomies of scale. Cite and briefly discuss the main determinants of this phenomenon.
- Define economies of scope. Is this concept related to economies of scale? Explain.
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