Describe the long-run cost curves a typical firm faces and define a firm's minimum efficient scale
No costs are fixed within the long term.
A corporation can produce its product cheaply enough to supply it at a competitive price.
The medium term is a timespan over which all production and cost variables are uncertain. Firms ’ ability to change all overall costs, but they can only impact costs in the near term by modifying output levels. Therefore, while a firm may have a mono in the short run, it may face opposition in the long term.
The future is that the period of your time when all costs are variable. The future depends on the specifics of the firm in question—it isn't an exact period of your time. No costs are fixed within the long term. A firm can build new factories and buy new machinery.The minimum efficient scale (MES) is that the point on a price curve when
At its current short-run level of production, a firm's average variable costs equal per unit, and its average fixed costs equal per unit. Its total costs at this production level equal
What is the firm's current output level?
What are its total variable costs at this output level?
What are its total fixed costs?
During autumn months, passenger railroads across the globe deal with a condition called slippery rail. It results from a combination of water, leaf oil, and pressure from the train's weight, which creates a slippery black ooze that prevents trains from gaining traction.
a. One solution for slippery rail is to cut back trees from all of a rail firm's rail network on a regular basis, thereby helping to prevent the problem from developing. If incurred, would this railroad expense be a better example of a fixed cost or a variable cost? Why?
b. Another way of addressing slippery rail is to wait until it begins to develop. Then the company purchases sand and dumps it on the slippery tracks so that trains already enroute within the rail network can proceed. If incurred, would this railroad expense be a better example of a fixed cost or a variable cost? Why?
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