On the downward sloping portion of a firm's long-run average cost curve, it is experiencing
A. diseconomies of scale.
B. constant returns to scale.
C. economies of scale.
D. diminishing marginal returns.
Answer: C
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If the demand for a good is determined to be "elastic," then the elasticity measure
A) is greater than 1.0. B) is equal to 1.0. C) is less than 1.0. D) is infinite.
GDP is not a complete measure of well-being
Indicate whether the statement is true or false
Suppose that there is a negative aggregate demand shock and the central bank commits to an inflation rate target. But if the commitment is not credible, then
A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will rise. C) economic contraction will be worse. D) all of the above. E) both B and C.
A one-year discount bond with a par value of $5000 sold today, at issuance, for $4750 has a yield to maturity of
A) 5.00%. B) 5.26%. C) 2.50%. D) 9.75%.