Microeconomics: Production, Costs, and Supply

What does the production function describe?

What does the law of diminishing returns state?

Which costs remain unchanged in the short run?

What are economies of scale?

What is the primary factor that determines a firm’s supply?

What causes a rightward shift in the supply curve?

What is the shape of the long-run average cost (LRAC) curve influenced by?

What happens to the marginal cost when the law of diminishing returns sets in?

How do firms achieve economies of scale?

What is the relationship between the law of supply and the supply curve?

What role do fixed costs play in the short run?

What leads to a leftward shift in the supply curve?

Which type of cost is incurred when producing one more unit of output?

What happens when firms experience diseconomies of scale?

What is the long-run equilibrium in a perfectly competitive market?