In some industries, like insurance, both small and very large firms coexist and compete quite effectively in the market. This indicates that the long-run average total cost curve in these industries
a. is "U" shaped.
b. is downward sloping over all levels of output.
c. exhibits constant returns to scale over a wide range of output.
d. exhibits diseconomies of scale beginning at a low rate of output.
C
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The above figure shows the market for pizza. Which figure shows the effect of a new report by the U.S. Surgeon General that eating pizza lowers cholesterol levels, an outcome many people want?
A) Figure A B) Figure B C) Figure C D) Figure D
If the MPC is 0, then the multiplier is
a. 0. b. 1. c. infinite. d. None of the above is correct.
GDP = C + I + G + Xn. From the outbreak of World War I (1914) until the 1970s, if Xn were not included our GDP would be
A. higher. B. the same. C. lower.
According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because
A. an increase in the money supply will have little impact on interest rates. B. an increase in the money supply will raise the amount of government debt. C. an increase in the money supply will only lead to higher interest rates. D. an increase in the money supply will only lead to lower investment spending.