Suppose that in 2012 ABC Corp. produced 500 million units of a good at an average cost of $2, and in 2013 ABC Corp. expanded its plant capacity and produced 600 million units at an average cost of also $2. In this range, one can conclude that ABC Corp. is experiencing:
A. economies of scale.
B. diseconomies of scale.
C. neither economies of scale or diseconomies of scale.
D. diminishing marginal product.
Answer: C
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Assume a fixed demand for money curve and the Fed decreases the money supply. In response, people will:
a. sell bonds, thus driving up the interest rate. b. sell bonds, thus driving down the interest rate. c. buy bonds, thus driving up the interest rate. d. buy bonds, thus driving down the interest rate.
If at the MC = MR output, AVC exceeds price:
A. new firms will enter this industry. B. the firm should produce the MC = MR output and realize an economic profit. C. some firms should shut down in the short run. D. the firm should expand its plant.
Other things being equal, when the money price of a good increases, its relative price
A. falls to zero. B. stays the same. C. decreases. D. increases.
________ were the main sources of mortgage loans in Europe between 2000 and 2009.
A. Treasury bonds B. Eurobonds C. Covered bonds D. Global bonds