Class 12 Micro Economics - Chapter Production and Costs NCERT Solutions | At which point does the SMC curve inters
At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer.
The SMC curve is a U-shaped curve due to the law of variable proportions. In order to understand the reason behind the U-shape of SMC, let us divide the SMC curve (UAB) into three different parts according to the law of variable proportions:
(a)UA part corresponds to increasing returns to factor.
(b)Minimum point A corresponds to constant returns to factor.
(c) AB part corresponds to decreasing returns to factor. In the initial production stages, the falling part of SMC (UA) is due to application of increasing returns to factor. Then the SMC stops falling and reaches its minimum point due to the existence of constant returns to a factor. After the minimum point A, SMC starts rising (i.e. part of SMC) due to the onset of decreasing returns of variable factor. This trend of SMC curve (initially falling, then becoming constant at its minimum point and then rising) makes it look like the English alphabet - .
More Questions From Class 12 Micro Economics - Chapter Production and Costs
- Q:-
What is the total product of input?
- Q:-
Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve?
- Q:-
Let the production function of a firm be Q=5L1/2K1/2Q=5L1/2K1/2 Find out the maximum possible output that the firm can produce with 100 units of LL and 100 units of KK.
- Q:-
What does the average fixed cost curve look like? Why does it look so?
- Q:-
What do the long-run marginal cost and the average cost curves look like?
- Q:-
When does a production function satisfy decreasing returns to scale?
- Q:-
Explain the concept of a production function
- Q:-
Explain the relationship between the marginal products and the total product of an input.
- Q:-
Why is the short-run marginal cost curve 'U'-shaped?
- Q:-
What is the law of variable proportions?
Popular Questions of Class 12 Micro Economics
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
Explain market equilibrium.
- Q:-
Discuss the central problems of an economy.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
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
-
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
Consider a market where there are just two consumers and suppose their demands for the good are given as follows:
Calculate the market demand for the good.
p
d1
d2
1
9
24
2
8
20
3
7
18
4
6
16
5
5
14
6
4
12
- Q:-
Comment on the shape of MR curve in case when TR curve is a
(a) Positively sloped straight line
(b) Horizontal straight line
- Q:-
What do you mean by substitutes? Give examples of two goods which are substitutes of each other.
- Q:-
Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?
- Q:-
Using supply and demand curves show how an increase in the price of shoes affects the price of a pair of socks and the number of pairs of socks bought and sold.
- Q:-
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.
- Q:-
Explain how price is determined in a perfectly competitive market with a fixed number of firms.
- Q:-
How is the equilibrium number of firms determined in a market where entry and exit is permitted?
- Q:-
How does an increase in the number of firms in a market affect the market supply curve?
- Q:-
Consider a market with two firms. In the following table, columns labelled as SS1 and SS2 give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.
Price (Rs.) SS1 (kg) SS2 (kg) 0
1
2
3
4
5
6
7
80
0
0
1
2
3
4
5
60
0
0
0
0.5
1
1.5
2
2.5
- All Chapters Of Class 12 Micro Economics
- All Subjects Of Class 12