profits

1. In the short run, if the price of the fixed factor is increased, what will happen to profits?
2. If a firm had everywhere increasing returns to scale, what would happen to its profits if prices remained fixed and if it doubled its scale of operation?
3. If a firm had decreasing returns to scale at all levels of output and it divided up into two equal-size smaller firms, what would happen to its overall profits?
4. A gardener exclaims: “For only $1 in seeds I’ve grown over $20 in produce!”
Besides the fact that most of the produce is in the form of zucchini, what other observations would a cynical economist make about this situation?