Economies of scale are present when:
a) average cost rises as input increases.
b) the LRAC curve is horizontal.
c) total fixed cost increases.
d) average total cost remains constant as input increases.
e) the LRAC curve slopes downward.
Ans: e) the LRAC curve slopes downward.
You might also like to view...
Using equations for public and private saving, show that saving must equal investment in a closed economy. Begin with the expression for total saving in the economy
What will be an ideal response?
Refer to the table below. If Stuffed Pies is currently producing 7 units of quality, to maximize profit, Stuffed Pies should ________ the units of quality.
Stuffed Pies is a frozen calzone manufacturer. The table above summarizes Stuffed Pies' marginal revenue and marginal cost of quality at various quality amounts.
A) not change
B) decrease by 50 percent
C) increase
D) decrease
Gasoline stations carrying the same fuel brand (e.g., Chevron) are able to charge different prices in San Francisco because:
A. location is a source for product differentiation. B. gasoline stations are perfect price discriminators. C. gasoline station operators form a cartel to act as a monopoly. D. fuel quality varies across stores.
U.S. Treasury bills pay no interest but are sold at a ________. That is, you will pay a lower purchase price than the amount you receive at maturity
A) premium B) collateral C) default D) discount