Because the short-run average total cost curve slopes downward for an information product, the firm experiences
A) a downward sloping marginal cost curve.
B) a downward sloping average variable cost curve.
C) short-run economies of operation.
D) long-run diseconomies of scale.
Answer: C
You might also like to view...
Explain what is meant by a devaluation of a currency. Under what circumstances would a country devalue its currency?
What will be an ideal response?
The concept of choosing the least-cost combination of resources for a given amount of output is known as
a. technical efficiency. b. the principle of diminishing marginal returns. c. economic efficiency. d. decreasing returns to scale.
The successful introduction and adoption of a new product or process is called
a. invention. b. innovation. c. economies of scale. d. economic growth.
Lower interest rates can lead to higher home prices, and this can lead to increased household spending since homeowners can spend this additional equity. If you were a lender, is there any danger in making loans to homeowners for this new equity or are these really risk-free loans since they are secured by the equity in the house?
What will be an ideal response?