In This Problem You Will Demonstrate Your Understanding of the Relationship

question 2

Essay

In this problem you will demonstrate your understanding of the relationship between short-run and long run average cost curves.
(a) Draw an example of a long-run average cost curve. Find the minimum point of the long run average cost curve and label that point "A" for reference. What is the slope of the LRATC curve to the left of point A? Why does it have this slope? What is the slope of the LRATC curve to the right of point A? Why does it have this slope?
(b) Choose a point to the left of point A on the LRATC curve, and label it point B for reference. Choose a point to the right of point A on the LRATC curve. Label it point C for reference. Draw the SRATC curve associated with point A and label it SRATCa. Is point A the minimum point of SRATCa? Why does SRATCa have the slope that it does at points to the left and right of point A?
(c) Draw SRATC curves associated with points B and C and label them SRATCb and SRATCc. Are points B and C minimum points for SRATCb and SRATCc? Explain.

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Definitions:

Long-Day Plant

Plant that flowers when day length is longer than a critical length; e.g., wheat, barley, clover, and spinach.

Phytochrome

A plant pigment involved in regulating various processes like germination and flowering in response to light conditions.

Pollinate

The transfer of pollen from the male parts of a flower to the female parts of the same or another flower, leading to fertilization and the production of seeds.

Cytokinin

A class of plant hormones that promote cell division and growth, and affect various aspects of plant development including shoot and root growth.