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.
Answer:
(b) Falling long-run average cost curve.
Reason:
If a firm encountering economies of scale over some range of
output, it will have a falling long range average cost curve
because there could be efficiencies in cost or production of goods
that can be exploited for modest increase in the production
quantity keeping remaining factors same.
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A firm encountering economies of scale over some range of output will have a: • rising...
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