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    types of costs faced by a firm

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    Q: Among the types of costs faced by a firm (short-run costs, fixed and variable, as well as long-run costs), how can technology help firms to lower their costs? What are some specific examples of how firms have used technology to lower costs?

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    Solution Preview

    If we look at the production function technology play a crucial role. Technology is used to increase the productivity of the firm. When a firm uses technology it's per unit cost of production decline because of an increase in the output per unit of cost. A reduction in per unit cost automatically reduces the cost in short run.

    As far as the variable cost of the firm is concerned, technology helps the ...

    Solution Summary

    This solution discusses some of the types of costs that are faced by a firm.

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