How do increasing returns to scale affect the shape of the long-run average cost curve?
What will be an ideal response?
When the firm faces increasing returns to scale, average costs per unit produced fall as the firm's scale of production rises. Thus, the long-run average cost curve would be downward sloping.
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With ATMs, it is possible to retrieve cash from the bank at any time. One hundred years ago, one could only get cash from the bank during business hours, say, 9 am to 3 pm. The present availability of 24-hour service has arisen because:
A. the cost of providing 24-hour service is much lower today. B. government forced banks to become more convenient. C. flexibility was not valued 100 years ago. D. it was impossible to provide 24-hour service 100 years ago.
"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand." In which of these two statements are the terms demand and supply being used correctly?
A. In neither statement. B. In the second statement. C. In the first statement. D. In both statements.
What is an export subsidy? Discuss some of the recent examples where such subsidies were controversial.
What will be an ideal response?
Which of the following is TRUE about the effects of an excise tax if consumers are totally unresponsive to price changes?
A. Producers pay all of the excise tax. B. Consumers pay all of the excise tax. C. Neither consumers nor producers pay the excise tax. D. Consumers and producers share the excise tax equally.