Cost Procution (?) Flashcards
Sunk Costs are NOT…
considered in marginal analysis
The long run average cost curve will be upward sloping when the firm is experiencing….
diseconomies of scale
diseconomies of scale
when an increase in firm’s output reduces its long-run average total cost, it experiences:
economies of scale
economies of scale
A firm that is experiencing diminishing returns in management’s ability to use and disseminate information as it increases production in the long run is an example of
diseconomies of scale
In the long run all costs are…
variable
Standardized product
price taker
Monopoly competition is described as
a market structure having a single producer selling a single, undifferentiated product
Most electric, gas, and water companies are examples of
natural monopolies
An oligopoly is an industry which
there are a small number of firms, each producing a differentiated or similar product
a monopolistically competitive industry is made up of
many firms producing a differentiated product
goods that are subject to network externalities tend to be ones:
for which the value of the good to an individual is greater when more people use it
oligopoly is a market structure that is characterized by a
small number of independent firms producing identical or differentiated products
in monopolistic competition each firm
has some ability to set the price of its differentiated good
monopolistic competition is an industry characterized by a
large number of firms producing similar products, with relatively easy entry for firms
Assume a firm employs two inputs, A and B. The optimal hiring of inputs occurs when which of the following is true?
MP(A)/P(A)=MP(B)/P(B)
According to the cost minimization rule, the firm must hire labor and capital to the point where
the marginal product per dollar is equal for both inputs
