a. If IRS are present, the optimal position for a firm to operate plant and equipment is at capacity which is defined as the minimum point on its SRAC curve for that output.
b. For a competitive firm whose cost structure may be characterized, for example, by a cubic equation, the profit function can be expressed as a relationship that depends upon price and quantity.
c. Long run profits are zero in a Constant Cost Industry but are positive in an Increasing Cost Industry.
d.. Explain the meaning of the condition w/MPL = r/MPK. How does it differ from MPL/w = MPK/r