For the function y = x2x₂ + 5x22 determine whether it exhibits increasing, decreasing or constant returns to scale or whether it is impossible to tell from the information given. O Increasing (or economies of scale) O Decreasing (or diseconomies of scale) O Constant returns to scale O Cannot tell from the information given

For the function y = x2x₂ + 5x22 determine whether it exhibits increasing, decreasing or constant returns to scale or whether it is impossible to tell from the information given. O Increasing (or economies of scale) O Decreasing (or diseconomies of scale) O Constant returns to scale O Cannot tell from the information given

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 27RQ: What is the difference between economies of scale, constant returns to scale, and diseconomies of...

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The figure to the right illustrates the long-run average cost curve for a company that makes motors. Suppose the company produces & thousand moters per month. Is it experiencing economies of scale, diseconomies of scale, or constant returns to scale? If the company produces 4 theusand motors, then it experiences Average total cont 45.00 44.00 40 00 36.00 32.00 28.00 24.00 20.00 16.00 12:00 5.00 4.00 0.00 Long-nun average cost 4610 12 14 16 18 20 Quantity (motors per month in 1,000)
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می do ak pound of coffee) 3.00 2.00 1.00 ATC1 ATC2 ATC3 5 10 13 15 19 20 Output (thousands of pounds of coffee per month) In the above figure, economies of scale are present up to an output level of 13,000 pounds of coffee. O 10,000 pounds of coffee. ATC4 5,000 pounds of coffee. O 15,000 pounds of coffee.
Question 5 Diseconomices of scale means O As output increases, long run avearge cost (LRAC) will not change O As output increases , long run avearge cost (LRAC) decreases O if we duble inputs, output will increase by double O As output increases , long run avearge cost (LRAC) increases
QUESTION 7 Diseconomices of scale means O As output increases, long run avearge cost (LRAC) increases O if we duble inputs, output will increase by double O As output increases, long run avearge cost (LRAC) will not change O As output increases, long run avearge cost (LRAC) decreases