A firm scaled down its operation by reducing all inputs by 50% and experienced a more-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level.
B. diseconomies of scale at the current output level.
C. a constant long-run average cost at the current output level.
D. diminishing marginal returns at the current output level.
Answer: A
You might also like to view...
A potential problem arises in principal-agent relationships
a. because the agents' actions are not always observed by the principals b. because the principals' actions are not always observed by the agents c. because the agent's and the principals' actions are always observed by each other d. the observability of actions is irrelevant
Anything that is generally acceptable in trading for goods and services is a:
A. Medium of exchange B. Capital good C. Store of value D. Token money
Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. 
Figure 8.4 Refer to Figure 8.4. Micro Oven's average fixed costs of producing six units of output are
A. $41.66. B. $50. C. $100. D. indeterminate from this information.
How do governments use spending and taxation to reduce inequality and poverty in an economy?
What will be an ideal response?