Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | Can there be some fixed cost in the long
Can there be some fixed cost in the long run? If not, why?
Average fixed cost curve looks like a rectangular hyperbola. It is defined as the ratio of TFC to output. We know that TFC remains constant throughout all the output levels and as output increases, with TFC being constant, AFC decreases. When output level is close to zero, AFC is infinitely large and by contrast when output level is very large, AFC tends to zero but never becomes zero. AFC can never be zero because it is a rectangular hyperbola and it never intersects the x-axis and thereby can never be equal to zero.
More Questions From Class 12 Micro Economics - Chapter Production and Costs
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The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
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What are the average fixed cost, average variable cost and average cost of a firm? How are they related?
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(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
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From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
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Recently Viewed Questions of Class 12 Micro Economics
- Q:-
What is the relation between market price and marginal revenue of a price-taking firm?
- Q:-
Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.
Quantity Sold TR MR AR 0
1
2
3
4
5
6 - Q:-
How does an increase in the price of an input affect the supply curve of a firm?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
Suppose the demand and supply curve of commodity XX in a perfectly competitive market are given by:
qD =700 - p
qs = 500 + 3p for p ≥ 15
= 0 or 0 ≤ p <15
Assume that the market consists of identical firms. Identify the reason behind the market supply of commodity X being zero at any price less than Rs 15. What will be the equilibrium price for this commodity? At equilibrium, what quantity of X will be produced?
- Q:-
There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.
Price (Rs.) SS1 (units) 0
1
2
3
4
5
6
7
80
0
2
4
6
8
10
12
14 - Q:-
How do the equilibrium price and the quantity of a commodity change when the price of input used in its production changes?
- Q:-
The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.
Output TC (Rs.) 0
1
2
3
4
5
6
7
8
9
105
15
22
27
31
38
49
63
81
101
123 - Q:-
Explain how price is determined in a perfectly competitive market with a fixed number of firms.
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