Suppose that in 2012 ABC Corp. produced 500 million units of a good at an average cost of $2, and in 2013 ABC Corp. expanded its plant capacity and produced 600 million units at an average cost of $1.80. In this range, one can conclude that ABC Corp. is experiencing:
A. economies of scale.
B. diseconomies of scale.
C. neither economies of scale or diseconomies of scale.
D. diminishing marginal product.
Answer: A
You might also like to view...
If marginal costs are constant what will the average variable cost curve look like? What about the average total cost curve?
What will be an ideal response?
When aggregate expenditure is less than GDP, which of the following is true?
A) There was an unplanned increase in inventories. B) Households bought more new homes than they anticipated. C) Firms spent more on capital goods than they anticipated. D) All of the above must be true when aggregate expenditure is less than GDP.
A search good is a product
A) with qualities that consumers lack the expertise to assess without assistance. B) that emphasizes the features of its product. C) with characteristics that enable an individual to evaluate the product's quality in advance of a purchase. D) that an individual must consume before the quality can be established.
One possible reason for Wal-Mart's success is that centralized-decision making provides economies of scale that allow it to aggressively bargain down wholesale prices of standard consumer goods
Indicate whether the statement is true or false