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Law of variable proportion and law of returns to scale?
Under Law of variable proportion: only one variable input varies all other variable kept constant. Under Law of Return to Scale: All the variable inputs varies except the enterprise. Law of variable proportion is for short period; law of return to scale is for long period. Law of variable proportion shows the relationship if one variable input increase (eg: Labour) by keeping all other variable constant; total product and marginal product increase upto a certain point after that it will increase at a diminishing rate. it shows in three stage first increase then constant and then decrease. Law of return to scale shows the relationship between inputs and output at three different stages: 1. output increase more than inputs, 2. output and input are constant, 3. output is less than proportionate input.
What is the behavior of total variable cost as output increases?
tvc will also inscrease as output increase
What effect will an increase in output have on average fixed average variable and average total cost?
average fixed will go down, average variable will remain the same, and average total will go down.
What is total variable cost when 100 units of output are produced and total cost is 1050?
What is the total variable cost when output is 100 units in Figure 6.2
Does total variable cost increase as output increases?
Total variable cost has a direct relationship with the level of output or units produced so it changes according to the change in the production units or level of production.For example:Variable cost per unit = 10so if units produced = 10then variable cost = 10 * 10 = 100if units produced = 8variable cost = 10 * 8 = 80
Law of variable proportion and law of returns to scale?
Under Law of variable proportion: only one variable input varies all other variable kept constant. Under Law of Return to Scale: All the variable inputs varies except the enterprise. Law of variable proportion is for short period; law of return to scale is for long period. Law of variable proportion shows the relationship if one variable input increase (eg: Labour) by keeping all other variable constant; total product and marginal product increase upto a certain point after that it will increase at a diminishing rate. it shows in three stage first increase then constant and then decrease. Law of return to scale shows the relationship between inputs and output at three different stages: 1. output increase more than inputs, 2. output and input are constant, 3. output is less than proportionate input.
How does the law of variable proportion affect the cost curve?
As we know law of variable proportion means as we increase the quantity of one input keeping other input fix... the Total physical product increase @ increasing rate than increase at decreasing rate than at decreasing rate.... and cost curve is totally dependent upon total variable cost curve.... so if the output is increasing this is due to increase in variable factors( labors) and if labors increase the cost will be obviously more as the labor increase....+
What is the behavior of total variable cost as output increases?
tvc will also inscrease as output increase
When total variable cost may increase variable cost per unit is constant or no?
Total variable cost can increase while the variable cost per unit remains constant if the total quantity of output produced increases. In this scenario, the variable cost per unit does not change, but since more units are being produced, the overall total variable cost rises. Conversely, if the output level stays the same, an increase in total variable cost would imply an increase in the variable cost per unit.
What are example of variable expenses?
Variable costs are costs that increase in total as output increases. For example, total labor costs increase per each hour worked; total direct materials costs increase per unit produced, etc.
What effect will an increase in output have on average fixed average variable and average total cost?
average fixed will go down, average variable will remain the same, and average total will go down.
What are example of expenses?
Variable costs are costs that increase in total as output increases. For example, total labor costs increase per each hour worked; total direct materials costs increase per unit produced, etc.
What is total variable cost when 100 units of output are produced and total cost is 1050?
What is the total variable cost when output is 100 units in Figure 6.2
As output increases total variable costs?
If the output increases, so will the variable cost. Though, variable cost is not directly proportionate to the output, still it will witness an incline.
Does total variable cost increase as output increases?
Total variable cost has a direct relationship with the level of output or units produced so it changes according to the change in the production units or level of production.For example:Variable cost per unit = 10so if units produced = 10then variable cost = 10 * 10 = 100if units produced = 8variable cost = 10 * 8 = 80
How do you calculate total vaiable cost per unit?
Total Variable Cost divided by Quantity of Output
When cost relationships are linear total variable prime costs will vary in proportion to changes in?
Volume of Production
