When the Defense Department ordered 132 new airplanes, the cost per plane was estimated to be $580 million. A cut in the order to 75 planes increased the per plane cost to $800 million. This change in per unit cost can be explained by:

A. A move to minimum efficient scale
B. The law of diminishing returns
C. The loss of economies of scale
D. An increase in fixed cost


C. The loss of economies of scale

Economics

You might also like to view...

Figure 3-17


Refer to . When the price is P1, consumer surplus is
a.
A.
b.
A + B.
c.
A + B + C.
d.
A + B + D.

Economics

According to new classical economists, if the Fed increases the money supply after it announces it, output ________ and the price level ________.

A. remains constant; remains constant B. increases; remains constant C. increases; increase D. remains constant; increases

Economics

If output is set at the kink of the kinked demand model, then there:

A. Is a strong incentive for rivals to decrease prices B. Is a strong incentive for rivals to increase prices C. Is one price at which marginal revenue equals marginal cost D. Are several prices at which marginal revenue equals marginal cost

Economics

A single payer system in the United States would

A. decrease availability of health care services to those who are currently uninsured. B. likely fail because no other nations have tried it. C. necessitate a tax increase. D. likely decrease the waiting time for certain procedures.

Economics