If a firm's long-run average cost goes from $3 to $2.5 when output increases, the firm is experiencing ________.
economies of scale
constant returns to scale
diseconomies of scale
a shift in its long-run average cost curve
A firm experience economies to scale when the average cost falls as more output is produced. This helps the firm to earn higher profit. These cost savings are gained with increased production level. It is given that the long-run average cost falls from $3 to $2.50, so the firm is experiencing economies to scale. Therefore, the correct answer is 'Option A'.
If a firm's long-run average cost goes from $3 to $2.5 when output increases, the firm...
When the firm increases output and the costs rise disproportionately slower, then the long-run average cost curve is _and the firm is experiencing O A. horizontal, constant returns to scale OB. upward sloping; diseconomies of scale O C. downward sloping; constant returns to scale OD. downward sloping, economies of scale
13. As output (plant size) increases, economies of scale occur when the A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant 14. Economies of scale can occur as a result of which of the following? A) increasing marginal costs as the firm increases its size B) higher fixed cost as the firm increases its size C) management difficulties as the firm increases its size D) greater specialization...
Assume a firm builds a larger plant and, at any particular output, its short-run average cost increases. Which of the following statements is correct? Diseconomies of scale must be present. Economies, diseconomies, and constant returns to scale are all possible. Constant returns to scale must be present Economies of scale must be present A firm's economic capacity and its most productive output level are the same. True False
(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...
An increase in long-run average costs resulting from increases in output is __________. Question 18 options: attributed to constant returns to scale attributed to diseconomies of scale attributed to the law of diminishing marginal product attributed to economies of scale
If the long-run average total cost curve for a firm is horizontal in a relevant range of production, then it indicates that there rev: 06_26_2018 Multiple Choice isn’t a minimum efficiency scale. are diseconomies of scale. are economies of scale. are constant returns to scale.
QUESTION 30 A downward-sloping portion of a long-run average total cost curve is the result of: economies of scale. diseconomies of scale. diminishing returns. the existence of fixed resources. 2.5 points QUESTION 31 In the long run, firms in many industries often experience a falling average total cost curve as a result of: gains through trade. increasing marginal returns. economies of scale. lower fixed costs. 2.5 points QUESTION 32 A large aircraft manufacturer, like Boeing, may have a...
When a firm increases its plant size in the long run and its per-unit costs fall, this is called A. diminishing returns, and is shown by the downward-sloping portion of the MP curve (or the upward-sloping portion of the MC curve). B. constant returns to scale, and is shown by the flat portion of the LRATC curve. C. diseconomies of scale, and is shown by the upward-sloping portion of the LRATC curve. D. economies of scale, and is shown by...
Economies of scale occur when: Select one: a. the long-run average cost rises as output increases. b. the marginal cost falls as output increases. c. average fixed costs are constant. d. the long-run average cost falls as output increases