Which of the following is most likely an example of constant returns to scale?

A. Alpha-Beta Inc. raised its price 10 percent after a 5 percent increase in production costs.
B. The XYZ Co. increased production 25 percent and experienced a 30 percent increase in its total cost.
C. The per-unit costs of Excel Publishing Company's manuals fell after a large order was received from the government.
D. Widget Manufacturing doubled its production by opening a new plant that was identical to its old plant.


Answer: D

Economics

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Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below.Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. Which of the following statements is true?

A. Acme has a lower marginal cost than does Generic. B. Acme has greater economies of scale than does Generic. C. Acme and Generic have the same marginal cost. D. Marginal cost at each firm depends on the level of output.

Economics

Antitrust cases against Eastman Kodak, International Harvester, United Shoe Machinery, and United States Steel resulted in the firms

A. being fined and then dissolved. B. settling their cases with consent decrees. C. being found not guilty of unreasonable conduct under the Sherman Act. D. being found guilty of tying under the Clayton Act.

Economics

Refer to the information provided in Figure 13.10 below to answer the question(s) that follow.  Figure 13.10 Refer to Figure 13.10. For Armstrong Cable, the profit-maximizing number of subscribers is

A. 800. B. 1,000. C. 2,200. D. 2,500.

Economics

Refer to Figure 26.4 for a monopolistically competitive firm. If the firm currently faces Demand2 and MR2, then it will earn

A. A negative economic profit, and firms will exit the industry. B. A positive economic profit, and firms will enter the industry. C. A positive economic profit, and firms will exit the industry. D. Zero economic profit, and neither entry nor exit will occur.

Economics