Consider a Wal-Mart supercenter and a 7-Eleven store. In the long run,
A) Wal-Mart or 7-Eleven may have economies of scale depending on how many customers are served.
B) Wal-Mart will definitely have lower average costs because supercenters serve many more customers.
C) The 7-Eleven store will definitely have lower average costs because their small stores are cheaper to build.
D) Wal-Mart's average total cost will decline faster than the 7-Eleven store and experience diseconomies of scale.
E) The 7-Eleven store's average total cost will be lower than Wal-Mart's and always experience economies of scale.
A
You might also like to view...
Structural unemployment is the result of
A) technological change or foreign competition. B) normal labor market turnover. C) a slowdown in the rate of economic expansion. D) irresponsible workers with poor work habits. E) changing weather patterns through the year.
Which of the following topics would be covered in microeconomics? a. The effects of an increase in the supply of lumber on the homebuilding industry. b. The unemployment rate
c. The effects of interest rates on the overall economy. d. The inflation rate.
Cutthroat competition is on the opposite end of the competitive spectrum from
A. covert collusion. B. price leadership. C. open collusion. D. cartels.
Refer to the diagram. Assuming equilibrium price P 1, consumer surplus is represented by areas:
A. a + b.
B. a + b + c + d.
C. c + d.
D. a + c.