Diseconomies of scale exist over the range of output for which the long-run average cost curve is:
A. constant.
B. falling.
C. rising.
D. subject to diminishing returns.
Answer: C
You might also like to view...
Opportunity cost always arises when a trade-off decision is made.
Answer the following statement true (T) or false (F)
Because the price elasticity of supply for jumbo jets is 0.35, the supply of jumbo jets is
A) elastic. B) unit elastic. C) inelastic. D) perfectly elastic. E) perfectly inelastic.
Suppose that when a perfectly competitive firm produces 500 units of output a day, it earns an economic loss. If the price of each unit of output is $1.50, then, in the short run, it's clear that this firm:
A. is not maximizing its profit. B. should shut down. C. should produce more than 500 units a day. D. should not shut down if its total variable cost is less than $750.
Suppose a firm is employing labour (L) and capital (K) such that MPK/MPL = PK/PL. If the price of labour rises, the cost -minimizing firm should:
a) employ more capital and less labour because MPK/MPL < PK/PL. b) do nothing. c) employ more labour and less capital because MPK/MPL > PK/PL. d) employ more capital and less labour because MPK/MPL > PK/PL. e) employ more labour and less capital because MPK/MPL < PK/PL.