Early developers within a given industry benefit from economies of scale, in that they are able to
a. produce larger volumes at a lower cost.
b. shape the product based on what the consumer wants.
c. avoid competition by creating a monopoly.
d. start big instead of having to start small.
a. produce larger volumes at a lower cost.
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As real rates of interest increase in the economy, real investment spending increases
Indicate whether the statement is true or false
Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
a. neither good. b. automobiles. c. airplanes. d. both goods.
In the above figure, market equilibrium at point E yields the quantity X. The quantity X* is socially optimal amount. The government can achieve the optimal outcome by
A. establishing a tax of P3 - P1 per unit of the good sold. B. setting the price at P4. C. establishing a tax of P3 - P2 per unit of the good sold. D. setting the price at P1.
Refer to the above table. How do we know that this is NOT a competitive firm?
A. The marginal physical product decreases as the amount of labor hired increases. B. Marginal physical product cannot be computed for competitive firms. C. The marginal revenue product decreases as the amount of labor increases. D. The marginal revenue changes as output changes.