Microeconomics

MicroEcon

Your response should be at least 75 words in length. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

State the law of diminishing marginal utility. What does this law have to do with explaining consumer behavior? What is consumer surplus? How is consumer surplus related to the law of diminishing marginal utility?

Explain why demand is more elastic in the long run than in the short run.

Explain how a demand curve can be derived using utility theory.

Explain what causes economies of scale. Can economies of scale and diminishing marginal returns apply to the same firm? Explain.

In a meeting about whether to store inventory in a company-owned warehouse or rent a warehouse, a colleague says, "We should use our own warehouse and save the cost of renting one." Do you agree or disagree? Explain.