Economies of scale occur when a firm's
a. marginal costs are constant as output increases.
b. long-run average total costs are decreasing as output increases.
c. long-run average total costs are increasing as output increases.
d. marginal costs are equal to average total costs for all levels of output.
b
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If there is a negative externality, and the market output is 100 units more than the socially optimal output, then it follows that
A. the external costs associated with the negative externality are greater than the marginal private costs. B. the external costs associated with the negative externality are less than the marginal private costs. C. there is market failure. D. any tax imposed on the production of the output will bring about the socially optimal output. E. none of the above
Assuming that Chinese food and Thai food are substitutes, if P. F. Chang's Chinese Restaurant reduces its prices: a. the sales of the nearby Bahn Thai restaurant will increase
b. demand for meals at P. F. Chang's will increase. c. the demand for meals at the Bahn Thai restaurant will decrease. d. the quantity of food demanded from P. F. Chang's will decrease.
A dominant strategy
A. results in the best outcome for a player if other players also play the same strategy. B. is the best strategy for a player, regardless of the strategy chosen by other players. C. is present in every game. D. is identical to a Nash equilibrium.
Streaming Netflix movies would be considered:
A. an artificially scarce good. B. a public good. C. a common resource. D. a private good.