Refer to Figure 8.2. As the firm makes its long-run adjustment, which must be true?
A) It takes advantage of increasing returns to scale.
B) It suffers from decreasing returns to scale.
C) It takes advantage of increasing marginal product.
D) It takes advantage of economies of scale.
E) It takes advantage of diseconomies of scale.
D
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Independent, non-monopoly firms have an incentive advantage over monopolies in new-product innovation
Indicate whether the statement is true or false
Some years ago, the World Bank surveyed the ways in which countries encouraged or discouraged market activity. Its conclusion was
A. when poor people are allowed access to the institutions richer people enjoy, they are ill equipped to take advantage of those benefits. B. when poor people are allowed access to the institutions richer people enjoy, they can thrive and help themselves. C. that there was no measurable difference between the countries that actively encouraged market activity from those that discouraged it. D. without the proper resources, encouraging market activity had no effect.