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    Economies of scale

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    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 = $_________.

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    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.

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