When a firm’s AC eventually starts to rise, it is often because
A. executive salaries rise sharply as output rises.
B. the ability to manage larger and larger levels of output results in much higher administrative costs.
C. marginal cost increases rapidly at higher output levels.
D. firm output has started to decline.
Answer: B
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Which of the following would not be considered physical capital?
A. An optical lens B. A trained physicist C. A spotlight D. A clipboard
The time it takes the firms to respond to a higher or a lower interest rate is referred to as:
A. the inside lag for monetary policy. B. the inside lag for fiscal policy. C. the outside lag for monetary policy. D. the outside lag for fiscal policy.
As more workers are hired, the marginal physical product of labor eventually declines because
A. of diseconomies of scale. B. less efficient workers are hired as the number of workers increases. C. the amount of capital each worker has to work with declines as the number of workers increases. D. workers do not work well together when the number of workers increases.