Suppose an Industry Has No Fixed Costs

question 24

Essay

Suppose an industry has no fixed costs.Draw two graphs side by side for the industry.In the left graph draw a U-shaped average cost curve and the corresponding marginal cost curve.In the right graph,draw a downward sloping market demand curve.Also in the right graph,draw a short-run supply curve that would generate positive profit,and the long-run supply curve that would result in.

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Definitions:

Return on Investment

A measure of the profitability of an investment, calculated as the ratio of net profit to initial cost.

Investment Turnover

A ratio that measures how effectively a company uses its invested capital to generate sales revenue.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as a percentage of the investment's profit to its cost.

Support Department Cost

Support department cost refers to the expenses associated with departments that provide essential services or support to production departments but do not directly engage in the production process.