If a firm is operating in the range of diseconomies of scale, and if it is currently at the minimum point of its short-run average total cost curve, explain what action it can take to reduce its costs, if it does not want to change the quantity of output that it is producing
It can reduce its fixed capital. This will move it to a new short-run average total cost curve that is closer to
(or tangent to) the envelope curve at the desired level of output.
You might also like to view...
Dumping refers to
A) exporting products that do not meet domestic safety standards. B) selling inferior products to unsuspecting consumers. C) illegally avoiding tariffs by selling products on the black market. D) selling a product for a price below its cost of production.
Farm price supports require price floors.
Answer the following statement true (T) or false (F)
In the figure above, the economy is at point A when the price level rises to 120. Money wage rates and other resource prices remain constant. Firms are willing to supply output equal to
A) $15.5 trillion. B) $16.0 trillion. C) $16.5 trillion. D) None of the above answers is correct.
As one moves down a straight-line demand curve, the elasticity increases.
Answer the following statement true (T) or false (F)