Suppose McDonald's puts up five new stores in San Francisco using the exact same floor plan, capital equipment and number of workers, then the long run average cost curve of McDonald's would be ________ and the company experiences ________.
A. horizontal; constant returns to scale
B. horizontal; economies of scale
C. upward sloping; economies of scale
D. horizontal; diseconomies of scale
Answer: A
You might also like to view...
Modern paper money is fiat money because it is backed only by the faith the holder has in the government that issued it.
Answer the following statement true (T) or false (F)
As firms exit a monopolistically competitive market, profits of existing firms ____ and product diversity in the market ____
a. decline; decreases b. rise; decreases c. rise; increases d. decline; increases
Why does the wage gap between average wages for men and women exist?
a. There is systemic discrimination in labor markets. b. Men and women do not have the same skill sets. c. Men and women make different choices. d. There is no government policy regarding equal pay for equal work.
An efficient contract is an agreement in which
A) neither party can be made better off without harming the other party. B) both parties agree on its clauses. C) one party takes all. D) both parties agree to always do their best.