How do constant returns to scale affect the shape of the long-run average cost curve?
What will be an ideal response?
When the firm faces constant returns to scale, average costs per unit produced remain constant as the firm's scale of production rises. Thus, the long-run average cost curve would be horizontal.
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Which of the following would not cause the market supply of cell phones to change?
A. Taxes levied on cell phone production are reduced. B. Telecommunications are deregulated, and anyone who wants to can produce and sell cell phones. C. A reduction in the demand for cell phones causes the price to fall. D. A cheaper technology for producing plastics used in producing cell phones is developed.
The value to the consumer is based upon adding up
A. the most each consumer is willing to pay for a good. B. the difference between most a consumer is willing to pay for a good and the least a firm is willing to sell the good for. C. the least a firm is willing to sell the good for. D. the average of the most a consumer is willing to pay for a good and the least a firm is willing to sell the good for.