Explore BrainMass
Share

# Economies of scale

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

Column 1, 2, 3, is derived from a firm's long run expansion path. The price of capital is \$50 and the price of labor is \$30

Out put Capital Labor Total cost long run Long run average cost Long run marginal cost
20 8 12
40 15 20
60 25 35
80 40 50

Using the above table, answer the following questions

a. Economies of scale exist through_____________ units of output because________ is _______________.
b. At 20 Units of output LTC= \$________________ and LAC = \$ _____________. Between zero and 20 units LMC= \$_____________.
c. At 40 units of output LTC = \$___________ and LAC = \$__________. Between 20 and 40 units LMC = \$________.
d. Diseconomies of scale exist beyond________ units of output because _______ is __________.
e. At 60 units of output LTC = \$ _______ and LAC = \$_________. Between 40 and 60 units LMC= \$___________.
f. At 80 units of output LTC = \$__________ and LAC= \$________ . Between 60 and 80 units LMC = \$_________.

https://brainmass.com/economics/pricing-output-decisions/economies-scale-234284

#### Solution Preview

See the attached file. Thanks

Column 1, 2, 3, is derived from a firm's long run expansion path. The price of capital is \$50 and the price of labor is \$30

Out put Capital Labor Total cost long run Long run average cost Long run marginal ...

#### Solution Summary

Economies of scale are featured.

\$2.19