When the curve that envelops the series of possible short-run average total cost curves is horizontal, this means that there are
a. economies of scale
b. diseconomies of scale
c. constant returns to scale
d. diminishing returns
e. some fixed factors of production
C
You might also like to view...
The total product curve shows the relationship between total product and
A) cost. B) the quantity of labor. C) the average product. D) the marginal product. E) the marginal cost.
In considering "returns to scale" we assume that production processes are homothetic.
Answer the following statement true (T) or false (F)
In the figure above, if a pollution tax is imposed that is equal to the marginal external cost of pollution, then at the equilibrium, marginal social cost would ________ marginal benefit, and the quantity of chemical produced would be ________
A) exceed; above the efficient quantity B) exceed; below the efficient quantity C) be below; above the efficient quantity D) be below; below the efficient quantity E) equal; efficient
In the presence of a negative externality generated by producing a good, a competitive market will produce more of that good than is socially optimal
What will be an ideal response?