An increase in a firm's scale of production leads to no change in average total cost as long as there are
A. diseconomies of scale.
B. economies of scale.
C. negative returns to scale.
D. constant returns to scale.
Answer: D
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Airbus is a European jet airline producer. Indian Airlines wants to buy 23 Airbus planes from Airbus, due to increased demand for world travel. As a result
A) the demand curve for European euros and the supply curve for Indian rupees both shift rightward. B) the demand curve for European euros shifts rightward and the supply curve for Indian rupees shifts leftward. C) only the demand curve for Indian rupees shifts rightward. D) only the demand curve for European euros shifts rightward.
An increase in the rent that a firm pays for its factory does not increase ______
A. total cost B. fixed cost C. marginal cost D. average fixed cost
According to the figure, if MiiTunes charges low prices, The Rock Shop should:
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.
A. enter the market and earn $4 million.
B. enter the market and lose $2 million.
C. not enter the market and earn $0.
D. It cannot be determined what The Rock Shop will do.
Which of the following best illustrates the concept of "derived demand?"
a. An increase in the wages of auto workers will lead to an increase in the demand for robots in automobile factories. b. An automobile producer's decision to supply more cars will lead to an increase in the demand for automobile production workers. c. An automobile producer's decision to supply more minivans results from a decrease in the demand for station wagons. d. An increase in the price of gasoline will lead to an increase in the demand for small cars.