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When marginal costs are below average cost at a given output one can deduce that if output increases what happens?
when marginal costs are below average cost at a given output, one candeduce that, if output increases dose average costs fall or marginal costs will fall
What is the cause of price fluctuation?
Like everything else, it is supply and demand. There are artificial stimulations to the market that require time to sort out. For example, the current high price of fuel oil, not only creates high production costs, but also a higher demand for feed corn supplies by the ethanal production industry.
Do the fixed costs increase as output increases?
No these are costs such as rent stay basically same irrespective of output
What are a business firm's fixed and variable costs of production?
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
What happens when there is too much demand for available goods and services?
When there is too much demand for available goods/services, there is a shortage. To meet this excess demand, firms increase production (at higher costs) until demand = supply. Thus, a shortage generally implies price is too low.
What happen as the volume of output decreases?
Fixed costs per unit will increase.
For the average total cost curve of a firm without economies of scale what happen to costs as output increases?
costs go down
What is Ramsay pricing?
it assigns costs based on the price elasticity of demand. het higher the elasticity (elastic), the lower the charge of fixed costs when allocated amongst products.
When marginal costs are below average cost at a given output one can deduce that if output increases what happens?
when marginal costs are below average cost at a given output, one candeduce that, if output increases dose average costs fall or marginal costs will fall
What is the cause of price fluctuation?
Like everything else, it is supply and demand. There are artificial stimulations to the market that require time to sort out. For example, the current high price of fuel oil, not only creates high production costs, but also a higher demand for feed corn supplies by the ethanal production industry.
Do the fixed costs increase as output increases?
No these are costs such as rent stay basically same irrespective of output
What are a business firm's fixed and variable costs of production?
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
Firm A one firm in a competitive industry faces higher costs of production As a result conusmers end up paying higher prices Discuss?
If a firm is having higher costs than another in the same industry, they will pass the costs to the consumer. That has to happen if the firm is supposed to make any profits.
What happens when there is too much demand for available goods and services?
When there is too much demand for available goods/services, there is a shortage. To meet this excess demand, firms increase production (at higher costs) until demand = supply. Thus, a shortage generally implies price is too low.
How can a regulation affect a producers output decisions?
Regulation is much like a tax. Because it increases costs, it will lead to higher prices and lower output.
What can happen if costs and budget are not monitored?
These are costs that change according to output .The costs change directly according to how many products are made .An example of this is a business producing footballs will have varying requirements for amounts of rubber, lead and valves depending on how many footballs it makes .
What Costs do not vary with output?
fixed cost
