How does simultaneous consumption affect economies of scale?
What will be an ideal response?
Simultaneous (or nonreligious) consumption is a situation where a product can satisfy a large number of consumers at the same time. For example, once software is created for one customer the producer can provide it to another customer or to a million customers at essentially the same marginal cost. As the number of users increases, however, average total cost falls and the firm achieves greater economies of scale.
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Refer to the scenario above. Which of the following statements is true about the model?
A) The model is not based on any assumption. B) The predictions of the model will hold for every individual. C) The model describes the economic payoff of more education. D) The model can be applied for maximum 10 years of additional education.
When the price of gasoline increases significantly, the delivery companies like UPS, FedEx, and the USPS all find:
A. Their TVC curves shifting up B. Their TFC curves shifting up C. Themselves moving up along their TC curves D. Themselves moving up along their TVC curves