Problem
1. Is accounting profit the same as economic profit? If a firm's accounting statement revealed that it was making profits, would the firm always want to continue in business? Explain.
2. What is marginal cost? Explain why marginal cost will increase with time as the firm expands its output in the short run. Explain why the firm's average total cost curve in the short run is typically U-shaped.
3. Indicate the major reasons why the per unit costs of production are often lower for large firms that produce large outputs (both rate and volume) than for their smaller counterparts.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.