Homework 5 Solutions

Homework 5 Solutions - Week 5 Homework Chapter 9 #1....

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 5 Homework Chapter 9 #1 . Disagree. Constant returns to scale means that the long-run average cost curve is flat over most of its range. (b) Disagree. A firm suffering losses will continue to operate as long as total revenue covers variable cost. #4. One could make a case that some economies of scale probably exist in all five cases, but the case is much stronger in electric power (needs a big power plant or dam) and aircraft manufacturing (requires a big assembly line and a great deal of cooperation). Home Building: Home building is usually done by small independent contractors, although there are some big tract developers (for example, Ryan Homes) that produce tens of thousands of homes each year. They do quantity buying and use mass-produced parts. It is hard to find economies of scale of much significance in software development and vegetable farming. Although some firms in those industries are large, many are quite small and quite competitive. #14
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Homework 5 Solutions - Week 5 Homework Chapter 9 #1....

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online