Homework Answers
A = economies of scale
B = diseconomies of scale
C = neither economies or diseconomies of scale( constant return to scale
D = economies of scale.
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19. Which sections of the curve does the firm have economies of scale? Diseconomies of scale?...
Define economies of scale, minimum efficient scale, and diseconomies of scale. Sketch a long- run average...
Define economies of scale, minimum efficient scale, and diseconomies of scale. Sketch a long- run average cost curve and indicate/label which part of the curve represents each of these three definitions.
Which of the following is NOT true about the long run average cost curve (LRAC)? Select...
Which of the following is NOT true about the long run average cost curve (LRAC)? Select one: a. the shape of the LRAC is due to economies and diseconomies of scale b. the LRAC is influenced by the short run average cost curves c. the LRAC represents the least expensive average cost curve for any level of output d. the shape of the LRAC is due to the law of diminishing marginal returns
Does “downsizing” work well as a solution to diseconomies of scale? a. Yes, always b. No...
Does “downsizing” work well as a solution to diseconomies of scale? a. Yes, always b. No c. Yes, sometimes d. Only if marginal productivity is negative 2.Volume discounts on the purchase of raw materials, components, and inventory often create a. diseconomies of scale b. economies of scale c. rising costs due to the Law of Diminishing Returns d. a smaller MOS 3.The most important diseconomy of scale at the firm level is caused by or stems from a. capital indivisibility...
FRATC4 RATO, SRATC SRBATC2 (dollars) 1,000 4,000 2,000 3,000 Quantity 23. In Exhibit 6-14, a firm...
FRATC4 RATO, SRATC SRBATC2 (dollars) 1,000 4,000 2,000 3,000 Quantity 23. In Exhibit 6-14, a firm finds that it is experiencing numerous managerial and information problems. The position of its short and long-run average total cost curves suggest that it is operating at a production level: a. between 0 and 1,000. b. between 1,000 and 2,000. c. between 2,000 and 3,000. d. between 3,000 and 4,000. e. where it should shut down immediately. 24. In Exhibit 6-14, the U-shaped LRAC...
1. The long-run average cost curve slopes upward if there are: A. economies of scale B....
1. The long-run average cost curve slopes upward if there are: A. economies of scale B. diseconomies of scope in the management of multiplant operates C. Some factors without diminishing marginal returns D. diseconomies of scale E. no factor without diminishing marginal returns
(Click to select) economies of scale a. Long-run average total cost falls as the firm realize: rises when the firm...
(Click to select) economies of scale a. Long-run average total cost falls as the firm realize: rises when the firm experiences [ (Click to select) diseconomies of scale diminishing marginal returns increasing marginal returns b. The minimum efficient scale is the level of output produced by the smallest firm in the industry. smallest level of output at which a firm can produce. only level of output where long-run average total costs are minimized. smallest level of output needed to attain...
Which of the following statements is accurate? Select the correct answer below: A. when the long-run...
Which of the following statements is
accurate?
Select the correct answer below:
A. when the long-run average cost (LRAC)
decreases as output increases, a firm is experiencing diseconomies
of scale.
B. when the long-run average cost (LRAC)
increases as output increases, a firm is experiencing diseconomies
of scale.
C. when the long-run average cost (LRAC)
increases as output increases, a firm is experiencing economies of
scale.
D. when the long-run average cost (LRAC)
decreases as output increases, a firm is...
The upward sloping portion of a short-run total cost curve illustrates: a. Diseconomies to scale b....
The upward sloping portion of a short-run total cost curve illustrates: a. Diseconomies to scale b. Neither of the above c. Diminishing marginal returns
Empirical evidence on the shape of the average cost curve across industries is mixed. A 1992...
Empirical evidence on the shape of the average cost curve across industries is mixed. A 1992 study, by Robidoux and Lester, found that 57 % of Canadian firms had economies of scale, 23 % had neither economies or diseconomies of scale, and 14 % experienced diseconomies of scale. Can you think of examples of firms or industries that might fall into each category? Why would the firm experience economies of scale? Why would a firm experience diseconomies of scale? (150-250...
A firm encountering economies of scale over some range of output will have a: • rising...
A firm encountering economies of scale over some range of output will have a: • rising long-run average cost curve. • falling long-run average cost curve. • constant long-run average cost curve. • rising, then falling, then rising long-run average cost curve.
FRATC4 RATO, SRATC SRBATC2 (dollars) 1,000 4,000 2,000 3,000 Quantity 23. In Exhibit 6-14, a firm finds that it is experiencing numerous managerial and information problems. The position of its short and long-run average total cost curves suggest that it is operating at a production level: a. between 0 and 1,000. b. between 1,000 and 2,000. c. between 2,000 and 3,000. d. between 3,000 and 4,000. e. where it should shut down immediately. 24. In Exhibit 6-14, the U-shaped LRAC...
(Click to select) economies of scale a. Long-run average total cost falls as the firm realize: rises when the firm experiences [ (Click to select) diseconomies of scale diminishing marginal returns increasing marginal returns b. The minimum efficient scale is the level of output produced by the smallest firm in the industry. smallest level of output at which a firm can produce. only level of output where long-run average total costs are minimized. smallest level of output needed to attain...
Which of the following statements is
accurate?
Select the correct answer below:
A. when the long-run average cost (LRAC)
decreases as output increases, a firm is experiencing diseconomies
of scale.
B. when the long-run average cost (LRAC)
increases as output increases, a firm is experiencing diseconomies
of scale.
C. when the long-run average cost (LRAC)
increases as output increases, a firm is experiencing economies of
scale.
D. when the long-run average cost (LRAC)
decreases as output increases, a firm is...
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