At the minimum efficient scale
A) all possible economies of scale have not been exhausted.
B) marginal cost is at its minimum.
C) the firm has achieved the lowest possible average cost of production.
D) any increases in the scale of operation will encounter further economies of scale.
C
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Larry consumes at a point on his budget line where his marginal rate of substitution is less than the magnitude of the slope of his budget line. As Larry moves toward his consumer equilibrium point, he will move to a
A) lower budget line. B) higher budget line. C) lower indifference curve. D) higher indifference curve.
We expect the marginal utility curve to be downward sloping
Indicate whether the statement is true or false
If the government attempts to break up a natural monopoly to enforce competition in an industry
A. the average cost of producing the good will increase. B. the smallest firm will have a significant cost advantage over the larger, less efficient firms. C. the average cost of producing the good will decrease. D. the price paid by consumers will be expected to remain the same.
In the short run, if average variable cost equals $50, average total cost equals $75, and output equals 100, the total fixed cost must be:
A. $25. B. $2,500. C. $5,000. D. $7,500.