In the short run average costs eventually ________ because of diminishing returns, and in the long run average costs eventually ________ because of diseconomies of scale.
A. increase; increase
B. increase; decrease
C. decrease; decrease
D. decrease; increase
Answer: A
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Each point on a demand curve shows
A) the consumer surplus received from purchasing a given quantity of a product. B) the legally determined maximum price that sellers may charge for a given quantity of a product. C) the willingness of consumers to purchase a product at different prices. D) the economic surplus received from purchasing a given quantity of a product.
If the market price is at equilibrium, the deadweight loss is maximized
Indicate whether the statement is true or false
Which of the following is a step that economists take in order to examine a real-world issue?
a. Determine the results that will occur if the market being considered is a controlled market b. Look at the real-world results to see the similarities they hold with the results of a free market c. Suggest remedies and policies to alter the results of a free-market d. Suggest remedies or policies to alter the real-world result e. Assume that the market transactions, in a real-world, is completely controlled by the government
When taxes are imposed on a commodity,
a. there is never a deadweight loss. b. some consumers alter their consumption by not purchasing the taxed commodity. c. tax revenue will rise by the amount of the tax multiplied by the before-tax level of consumption. d. the taxes do not distort incentives.