One reason that diseconomies of scale arise is because:
A. of the difficulties involved in managing and coordinating a large business enterprise.
B. firms must be large both absolutely and relative to the market to employ the most efficient productive techniques available.
C. beyond some point marginal product declines as additional units of a variable resource (labor) are added to a fixed resource (capital).
D. the short-run average total cost curve rises when marginal product is increasing.
Answer: A
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Refer to the table above. What is the marginal rent cost if the firm decides to choose factory Very Close over factory Close?
A) -$100 B) -$200 C) $100 D) $200
If the government regulates the price a monopoly can charge, and the price ceiling is set below what the competitive market price would be, then
A) a shortage will exist. B) a surplus will exist. C) producer surplus is maximized. D) consumer surplus is maximized.
What effect does the entry of new firms in a monopolistically competitive market have on the economic profits of existing firms in the market? How might existing firms attempt to counteract this effect?
What will be an ideal response?
The Fed can directly control the federal funds rate
Indicate whether the statement is true or false