Suppose Fergie's Florist experiences ________ up to a certain point and ________ beyond that point. Its long-run average cost curve is most likely to be U-shaped.
A. economies of scale; diseconomies of scale
B. constant returns to scale; economies of scale
C. diseconomies of scale; constant returns to scale
D. diseconomies of scale; economies of scale
Answer: A
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Very Technical is a firm that sells computing equipment. It costs Very Technical $150 for each order of computer monitors and the variable cost of placing an order is $2 per monitor. Very Technical pays an annual holding cost of $8 per monitor. If Very Technical sells 4,000 computer monitors a year and they order 500 monitors, what is the total annual cost of the monitors?
A) $11,200 B) $9,500 C) $8,750 D) $12,500
Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. William can arrange 18 bouquets per day. What would be the total daily output of Kate's firm if she hired her husband?
a. 18 bouquets b. 19 bouquets c. 20 bouquets d. 38 bouquets
if import restrictions prohibit foreigners from selling various goods and services in the U.S Market
What will be an ideal response?
Total cost divided by the quantity of output the firm chooses when it can choose a production facility of any size describes:
A. the short-run average cost of production. B. the long-run average cost of production. C. the short-run marginal cost of production. D. the long-run marginal cost of production.