Costs & Business Behavior

Question 1

Production Function

Answer 1

Relation between quantity of inputs and quantity of products

Question 2

Marginal Product

Answer 2

Change in output/Change in Input

Question 3

Law of Diminishing Marginal Product of Labour

Answer 3

If the inputs remain same, marginal product decreases as the number of labour increases(as more sharing of tech and stuff)

Question 4

Marginal Cost curve

Answer 4

Stonks - diminishing marginal product

Question 5

Variable Cost curve

Answer 5

Stonks - diminishing marginal product

Question 6

Fixed Cost curve

Answer 6

Uno Reverse stonks- divided by more q

Question 7

Average Total Cost curve

Answer 7

U shaped - falling fixed cost dominates in short run and then variable cost dominates

Question 8

Efficient Scale

Answer 8

Quantity where ATC is min

Question 9

Imp point

Answer 9

Marginal Cost curve intersects ATC at its min

Question 10

Imp point

Answer 10

In long run all costs are variable

Question 11

Economies of scale

Answer 11

When long run ATC is falling( increase in production

-> specialization

Question 12

Constant return to scale

Answer 12

When long run ATC is constant

Question 13

Diseconomies of scale

Answer 13

When long run ATC is rising (coordination problem in massive companies)