In the long run the local coffee shop incurs total costs of $625 when output is 1,250 cups of coffee and $750 when output is 1,500 cups of coffee. For this range of output, the coffee shop exhibits
a. economies of scale.
b. constant returns to scale.
c. diseconomies of scale.
d. efficient scale.
b
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Suppose there are 1000 identical wheat farmers. For each, TC = 10 + q2. Market demand is Q = 600,000 - 100p. Derive the short-run equilibrium Q, q, and p. Does the typical firm earn a short-run profit?
What will be an ideal response?
The demand for the product of a competitive price-taker firm is:
a. perfectly inelastic. b. perfectly elastic. c. greater than zero but less than one. d. dependent on the availability of substitutes for the firm's product.
The returns from productive capital investment are determined by interest rates
Indicate whether the statement is true or false
Which of the following is not an obstacle to development?
A. Overpopulation B. Excessive investment C. Political instability D. Corruption