When the firm increases output and the costs rise disproportionately faster, then the long-run average cost curve is ________ and the firm is experiencing ________.
A. horizontal; constant returns to scale
B. downward sloping; constant returns to scale
C. upward sloping; diseconomies of scale
D. downward sloping; economies of scale
Answer: C
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If, as a person consumes more and more of a good, each additional unit adds less satisfaction than the previous unit consumed, we are seeing the workings of
A) the law of increasing marginal opportunity cost. B) the law of demand. C) the law of supply. D) the law of diminishing marginal utility.
Special districts _____ the number of governments and generally _____ intergovernmental competition
a. increase; increase b. decrease; decrease c. increase; decrease d. decrease; increase
According to the Coase theorem, if private parties can bargain without cost, then the private market will solve the problem of externalities
a. True b. False Indicate whether the statement is true or false
Figure 9.6 represents the market for health insurance. Suppose there are two types of consumers, low-cost consumers with $2,000 average medical expenses per year, and high-cost customers with $4,000 average medical expenses per year. The insurance companies estimate that 40% of its customers are high-cost type. The uninformed side(s) of the market is (are):
A. customers. B. insurance companies. C. both customers and insurance companies. D. neither customers nor insurance companies.