In the long run, firms in many industries often experience falling average total costs as a result of
a. gains through trade.
b. increasing marginal returns.
c. economies of scale.
d. lower fixed costs.
C
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The costs of a recession are largely
A) losses to some people but gains to others. B) made up in the subsequent recovery. C) the consequences of falling prices. D) the costs of disappointed expectations. E) welcomed by advocates of zero economic growth.
An improvement in technology would result in
A) upward shifts of MC and reductions in output. B) upward shifts of MC and increases in output. C) downward shifts of MC and reductions in output. D) downward shifts of MC and increases in output. E) increased quality of the good, but little change in MC.
Internal markets
A) do not have the same problems as external markets. B) have externalities but do not fail. C) have the same problems as external markets. D) are more useful relative to external markets.
According to dynamic tax analysis, continually increasing the tax rate will eventually
A. cause an increase in the tax base. B. cause a decrease in the tax base. C. result in an initial decrease in the tax base followed ultimately by a rise in the tax base. D. have no impact on the tax base.