Assume that you observe the long-run average cost curve of ACME Bookstores, a national chain. Starting from the point on the curve where output is zero and moving to the right, which of the following lists the behavior of long-run average costs in the
correct sequence (that is, which will be observed first, second, etc.)?
A) minimum efficient scale; economies of scale; constant returns to scale; diseconomies of scale
B) economies of scale; constant returns to scale; diseconomies of scale; minimum efficient scale
C) constant returns to scale; economies of scale; minimum efficient scale; diseconomies of scale
D) economies of scale; minimum efficient scale; constant returns to scale; diseconomies of scale
Answer: D
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A perfectly competitive firm's output is currently such that its marginal revenue is $5 and marginal cost is $4. Assuming profit maximization, the firm should
A. cut price and increase output. B. raise price and decrease output. C. leave price unchanged and decrease output. D. leave price unchanged and increase output.
A person who takes less care of his health after obtaining a health insurance is creating a negative externality
a. True b. False Indicate whether the statement is true or false
Which of the following would most likely be highly price-elastic?
a. The demand for milk by a household b. The demand for insulin by a diabetes patient c. The demand for water d. The demand for new houses e. The demand for coal over a period of one month
Which of the following is an example of physical capital?
a. the strength of workers b. on the job training c. financial assets like cash and bonds d. the equipment in a factory