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2 pages/≈550 words
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Mathematics & Economics
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Supply And Production Costs: Explicit And Implicit Costs Of Production (Essay Sample)

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Assignment is due by Wednesday April 19 on or before 7 p.m. PST.
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The formula for question #5 can be calculated with excel, please show how you arrived at the number to complete the chart.
Hello, please have the writer use the updated chart that reads revised and disregard the chart submitted with the original order. All else remains the same. Thank you

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Content:

Supply and Production Costs
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Institution
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Explain the difference between explicit and implicit costs of production.
Economists consider the cost of production as the total of explicit and implicit costs. Explicit costs are the payments to the non-owners to run a company, and represent the business expenses that are easily identified as they are the cash flows that reduce the business profitability. On the contrary, the implicit costs represent the value of resources utilized in the production process where there are no monetary payments. They are implied costs that are the opportunity costs equated to what firms give up to utilize the factors of production (Lulu Press, 2016). For instance, a business owner who forgoes their salary even while running the business. There is an imputed value that the firm may use based on the best alternative use. Normal profits are another example of the implicit costs as they represent the minimum payments to keep the owner self-employed.
Explain the reasoning behind the U-shaped, long-run, average cost curve.
In the long run all the factors of production are variable and this affects the cost as the output variable. The long run costs first decrease when the output increase because of the economies of scale, and the costs increase at a decreasing rate the average cost of production falls. As such, in the long-run, the average cost curve is U-shaped since the costs first fall, due to the economies of scale, the...
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